The SEC Won’t Stop!! Here’s What Gary Gensler Said!!

The SEC has been going after crypto ever Since Gary Gensler ascended to the Agency's throne in 2021. at first it Looked like crypto was doomed but the Ruling in the riffle case and Grayscale's recent Victory put the Anti-crypto regulator on the ropes also It was believed in a recent hearing However Gary made it clear that the SEC Is far from being defeated and doubled Down on the agency's most recent Antics Including problematic rules that could Crush stocks and squeeze small Businesses that's why today we're going To summarize the hearing and tell you Exactly what it could mean for the Markets The hearing we'll be summarizing today Was titled quote oversight of the U.S Securities and Exchange Commission it Was hosted by the Senate Banking Committee last week and we'll leave a Link to the full Hearing in the Description it's worth the watch if you Have the time Pro tip watch it at 2x Speed now the hearing began with opening Statements from top-ranking politicians On both sides of the aisle followed by Gary himself the first to speak was Sherrod Brown and he started with an Eye-opening statement He said that new technologies risk Further concentrating the power on Wall Street now this is eye-opening because

It's quite accurate at least when it Comes to crypto if Mega Banks like JP Morgan and asset managers like BlackRock Were to take custody of and or stake Most of the crypto out there then they Would pretty much hold sway over the Crypto Market something to think about Anyways Sherrod continued with another Eye-opening statement and that's that It's been almost exactly 15 years since Lehman Brothers collapsed for context The collapse of Lehman Brothers is what Marked the beginning of the 2008 Financial crisis some believe that a Similar financial crisis is coming up And because two eye-opening statements Clearly weren't enough Sherrod threw Down a third 15 to 20 percent of the US Economy is directly or indirectly Controlled by private equity of course This includes asset managers like BlackRock who are Infamous for having Significant influence over publicly Traded companies Regarding crypto Sherrod said it's Dangerous and that FTX wasn't the only Bad apple he pointed out the fact that There are hacks and scams left and right But I should note that his tone wasn't Nearly as anti-crypto as it has been in Previous hearings this could be because Being anti-crypto is increasingly Unpopular in any case the second Politician to speak was Tim Scott

He started by slamming the SEC from Every possible angle including a lack of Transparency a lack of logical Leadership its hostility towards Innovation and its focus on things that Are not necessarily related to financial Markets Tim's only eye-opening statement Related to The sec's Climate disclosure Rules which would increase compliance Costs for publicly traded companies by At least four times if you've watched Any of our previous summaries of Gary's Hearings you'll know that this only Scratches the surface of what these Rules would do after Tim finished it was Gary's turn he started by saying that His views are his own and not those of The SEC for reference this is something That most Regulators say when they Testify and it's ironic because it's Known that their views do in fact have a Profound impact on financial regulations Regardless Gary said that the sec's Rules have shaped the US's economic Success for over 90 years however he Said a gold medalist must keep on Training if they want to keep their gold Medal in other words the SEC needs to Keep creating new rules to ensure that U.S financial markets Remain the largest Logically this ultimately depends on the Rules being proposed by the SEC Something which Gary didn't address all He said was that the SEC always takes

Feedback from the public in its Rulemaking processes note that Gary had Admitted in an earlier hearing that the Public basically means Wall Street Anyway once Gary was done the question Period began the first to ask questions Was John tester Now for those unfamiliar John is a Farmer and he's raised his concerns About the sec's proposed climate Disclosure rules in previous hearings That's because they would require Private as well as public companies to Report information as in previous Hearings John explained that this is Because of something called scope 3 Emissions which require companies to Collect information about emissions from Their suppliers and even from their Customers for many small businesses the Cost of compliance could be unaffordable Gary pushed back by saying that private Companies are not being directly Targeted but admitted that there needs To be some adjustment to the proposed Climate disclosure rules John was not Satisfied he underscored the fact that These regulations are already bleeding Into the private sector all Gary could Say is that they're working on it I'm Sure they are Sarcasm aside the second to ask Questions was Mike crapo and he focused On something unexpected yet extremely

Significant in short a U.S financial Regulator called finra suddenly halted The trading for a stock belonging to a Company called meta materials last December citing potential harm to Investors notably finra did not provide An explanation for why they halted the Trading of metamaterial stock The fact that they cited investor Protections is probably what prompted Mike to Ask Gary about this issue not Only did Gary not provide any Information but he also refused to say If the SEC was involved now this is Extremely significant for many reasons But the main one is that it highlights The fact that Regulators technically Have the power to stop stocks from Trading for whatever reasons they see Fit ever since the Black Monday crash of 1987 stock trading is automatically Halted when stocks fall too much some Would argue that Robin Hood's move to Prevent people from purchasing GameStop Stock in January 2021 set a precedent For stock trading to be halted when a Stock is rallying too much Now this remains to be seen But if it Does happen again then it could become More common over time another thing to Think about no doubt anyhow the third to Ask questions was Sherrod he asked a few General questions about a series of Topics including crypto about crypto

Gary said that any cryptos that are Securities must disclose information in Accordance with the sec's regulation Note that Gary thinks this includes Everything but BTC this inspired Sherrod To say that crypto is causing billions Of dollars of losses to which Gary said That there continues to be significant Non-compliance in the crypto industry To put things into perspective it was Believed that the sec's recent crypto Case losses were putting pressure on Gary to change his tone well apparently Not now the fourth to ask questions was Tim Scott he asked Gary about the sec's Recently proposed rules for open-ended Funds which includes money market funds For those unfamiliar money market funds Are basically like tradvice stable coins Except they share a portion of the Interest earned on their reserves with Investors If you've watched any of our videos About the banking crisis you'll know That money market funds have seen lots Of inflows because of rising interest Rates naturally the SEC wants to protect Investors by making it harder for Investors to cash out of money market Funds during a time of Crisis this is Why Tim asked Gary Point Blank if the SEC would be stopping its proposed rules For money market funds and the like Gary said that they've given ample time

For feedback Tim disagreed because the Rule had more questions for feedback Than the Dodd-Frank Act passed after the 2008 financial crisis put simply it Appears that the SEC is rushing out These rules for open-ended funds anyway The fifth to ask questions was Bob Menendez he asked Gary about how the Financial industry is using AI as part Of his response Gary predicted that a Future financial crisis will be caused By AI this is an eerie prediction Considering one of the only things Currently holding up the stock market is The AI narrative maybe Gary had watched 2001 A Space Odyssey the night before Anyway Bob then pivoted to asking about Diversity and inclusion ESG type Criteria if you will Gary confirmed that the SEC views that Investing based on diversity and Inclusion is not a breach of fiduciary Duty this doesn't really make sense as Fiduciary duty requires asset managers To maximize returns for investors Bob then pivoted again by asking about The aforementioned rules for money Market funds even Bob believed that These rules were unprecedented and asked Gary what inspired the SEC to introduce Them he revealed that it was because of The pandemic flash crash in March 2020. For those unfamiliar some money market Funds broke the buck during that crash

In crypto terms the money market funds Temporarily depict again the sec's Solution to this debegging risk is to Just make it very difficult for people To cash out of money market funds during A crisis great plan note that some Stablecoin issuers are holding a portion Of their reserves in Money Market funds Anyhow the sixth to ask questions was Mike rounds after scolding Gary for not Answering the letters he's been sending The SEC Mike revealed that the sec's Proposed AI rules would include almost Every kind of Market Analytics tool he Said this proves that the SEC is hostile Towards new technologies Gary didn't Flinch he just confirmed that yes the AI Rules would include just about every Kind of Market Analytics tool even if it Doesn't use AI so long as it gives any Predictive power to the user it will be Within the sec's oversight as always This is being done in the name of Investor protection makes you wonder if Any crypto platforms will be subject to The sec's oversight too Speculation aside the sixth to ask Questions was Catherine Cortez masto She asked Gary how the SEC will use AI Gary revealed that the SEC is already Using AI to quote analyze patterns in The markets which is truly terrifying The only thing more terrifying was Gary's answer to Catherine's crypto

Question Catherine asked if the SEC has enough Staff to regulate crypto Gary said no Because the crypto industry is quote Rife with more misconduct than any Industry he's ever seen all I could Think about was the sec's increasing Scrutiny of finance and its recent move To unseal previously sealed documents Now the seventh to ask questions was Tom Tillis he asked Gary what impact the Sec's rules would have on Market Liquidity not surprisingly Gary didn't Have an answer then the eighth to ask Questions was Mark Warner he asked Gary About AI besides the use of AI and deep Fakes in elections Mark said he was Concerned about AI undermining trust in U.S financial markets all Gary could say Was that new technologies will require New laws Thankfully Bill Haggerty managed to ask Some questions that we actually wanted To hear the answers to the main one was What it would take for a spot Bitcoin ETF to get approved interestingly Gary Didn't have any details he just said That the SEC is reviewing existing Proposals now this is interesting for Many reasons the main one being that Asset managers like Fidelity have Reportedly pressured the SEC to approve Their spot Bitcoin ETF applications in The past now that these asset managers

Have filed it's possible that Gary is Walking on extra eggshells about these Applications they're the ones the SEC Collects feedback from after all then The tenth to ask questions was the one And only Elizabeth Warren by now most of You will know that Elizabeth is probably The most anti-crypto politician in the United States that's why it's surprising She didn't ask any questions about Crypto instead she asked a bunch Questions about private equity During her exchange with Gary it was Revealed that private Equity firms hold Over 26 trillion dollars in assets under Management and saw inflows of four Trillion dollars last year Elizabeth Contrasted this with the fact that only One trillion dollars went into public Markets last year a clear Gap in Oversight JD Vance had a similarly aggressive line Of questioning the only difference was That it was extremely political the only Thing I'll say about that exchange is That the sec's enforcement activities Seemed to be partisan under Gary's Leadership JD warned that this partisan Ship could flip in the future To be honest this flip would probably be Very good for crypto perhaps it's just a Coincidence but the Democratic party Appears to be more anti-crypto than the Republican party right now the SEC

Appears to be aligned with the former an Alignment with the latter could Therefore be good for crypto anywho the 12th to ask questions was Chris Van Hollen he revealed something fascinating And that's that countries like China are Investing heavily in U.S private equity And cited a Financial Times article as Proof I'll leave a link to that article In the description if you're interested What's even more fascinating is that Gary didn't take issue with this fact he Said that the SEC is neutral about where Investors are coming from so long as They abide by U.S Securities laws this Is a bit shocking given the geopolitical Backdrop then the 13th to ask questions Was Cynthia Lumis by now most of you Will know that Cynthia is probably the Most pro-crypto politician in the US and Mesa Toshi be with her unlike her Anti-crypto counterpart Cynthia asked Many questions about crypto most of Which focused on crypto custody by Banks To bring you up to speed banks are Essentially the only cryptocustodians That the SEC recognizes but it has Effectively told banks that it's unsafe To custody crypto this is because it Requires them to report custody crypto As if it was an asset on their balance Sheets This comes with lots of regulations Cynthia asked how this rule made any

Sense if even fed chairman Jerome Powell Believes it's a bit ridiculous Gary Explained that it has to do with the Details of celsius's collapse which I Won't get into here Cynthia said this Explanation was an excuse and it Subjects Banks to unreasonable Regulations go Cynthia Then the 14th to ask questions was Tina Smith she asked when the climate Disclosure rules would be ready Gary Didn't provide an exact timeline but Explained that it's taken about 19 Months for the rules for open-ended Funds to be hammered out He also said that the SEC is not in a Rush if you watched our video about the Eu's upcoming ESG regulations you'll Know that the sec's climate disclosure Rules could pale in comparison once they Come into Force make no mistake they are Going to affect U.S companies and Consumers be sure to watch that video if You haven't already Then the 15th to ask questions was Katie Britt she reiterated that the sec's Rules around open-ended funds are even More elaborate than the rules it Proposed after the 2008 financial crisis She said that all of these rules Revealed that the SEC isn't listening to The average person it's listening to Wall Street instead she then asked Gary About another ESG type rule the SEC has

Proposed he just said that it's going to Take time to hammer it out to which Katie said that the SEC needs to think More about what effects its rules are Having on everyday people Some would say that's a tall order for Gary And The Gang to fill and this ties Into the questions asked by Kristen Cinema She asked if the SEC listens to any Small investors when it's making new Rules Gary said yes the SEC reaches out To these small investors on social media Go back and re-watch his answer because It's unbelievable there is no way the SEC listens to this feedback just look At the engagement with the posts the SEC Makes on X it's all comments about how Gary should resign and how the SEC sucks If the SEC was truly listening to this Feedback Gary would be long gone heck Even Kristen wasn't convinced by Gary's Answer The 17th to ask questions was Steve Danes after bashing the SEC and calling Gary an unelected bureaucrat he asked Him how it's possible that the SEC can Pass all of these rules without Congressional Authority Gary said that It's because they all fundamentally Relate to disclosures clever Now the last to ask questions was Jack Reed he asked Gary to tell the hearing More about private Equity specifically

If it's creating competition for banks And if they are a risk Gary explained That private Equity was a one trillion Dollar industry just a few decades ago And has since grown by almost 27x This has made private Equity larger than The banking sector which currently Stands at around 23 trillion Jack asked If private Equity is subject to the same Requirements as Banks specifically kyc He noted that there's evidence that even Russians continue to work with private Equity in the U.S despite sanctions Gary Admitted that there needs to be more Discussion about this when Jack asked if The SEC can do anything about it Gary Said no that's all up to Congress an Ironic statement given that the SEC Feels comfortable doing many other Things without Congressional approval And to add insult to injury Gary didn't Even give a clear answer when Jack asked Him whether he was concerned about Chinese and Russian Nationals investing Heavily in U.S private Equity nothing to See here Now this brings us on to the big Question and that's what all of this Means for the markets Well the answer depends on which Market We're talking about in this case there Seem to be three markets that the SEC is Affecting with its Antics the crypto Market the traditional markets and the

Economy itself Starting with the crypto Market Gary's Testimony suggests that the SEC isn't Finished doing damage The quote about the industry continuing To be Rife with non-compliance says it All it's safe to assume that the SEC Won't turn its focus away from crypto Until the entire industry has come into Compliance now the Silver Lining to this Is that the SEC has likely done most of The damage already it's sued binance it Sued coinbase it sued multiple crypto Projects and it sued multiple nft Projects sure it could continue doing All of the above but this has probably Been priced in already the only wild Card in the deck is the sec's attitude Towards the spot Bitcoin ETF filings as We've seen Gary has been very Tight-lipped about these applications And not just because he's inherently Incapable of providing any regulatory Clarity whatsoever BlackRock Fidelity And other such asset managers are Seriously big players and I can't stress Enough how much of an influence they Have over government entities like the SEC now it's assumed that the SEC will Eventually approve these applications Purely because of who these entities are But that could be wishful thinking From our perspective approving the spot Bitcoin ETF applications will require

Some significant changes to the crypto Industry first we can't say for sure What changes these are but oversight of Spot markets and of crypto custody seem To be two areas that the SEC still needs To see Improvement in This relates to the sec's rulemaking in The traditional markets which are Becoming increasingly hostile towards Private equity The line of questioning from some of the Politicians in the hearing suggests that There seems to be some tension between Private equity and the banking sector Which is possible if you watched our First video about the SEC you'll know That Gary spent most of his career at Goldman Sachs and that the SEC allegedly Destroyed banking documents related to The 2008 financial crisis it's possible If not likely that Mega banks have an Even bigger influence over the SEC than Asset managers come to think of it it's Possible that the sec's seemingly Nonsensical rulemaking is a consequence Of the tug of war between these two Factions what's funny is that this is Something we've literally been Speculating about for years and it seems That it's finally starting to come to The fore it's actually happening now It's unclear what effects the sec's Proposed rules would have on the stock Market but it's clear that some rules

Such as the climate disclosure rule will Increase costs this should decrease Profitability but this decline in Profits could be offset by funding from ESG obsessed asset managers like BlackRock that said some of the sec's Proposed rules for the stock market will In fact bleed over into the actual Economy as Senator tester noted in his Testimony almost all farmers in the United States work with publicly traded Companies Squeezing these Farmers could result in Economic issues such as inflation These economic issues would eventually Find their way into the stock market and What happens in the stock market would Eventually affect the crypto Market The good news is that most politicians Seem to be hyper aware of this Regardless of which side of the aisle They're sitting on the bad news is that The SEC has shown that it doesn't much Care for congressional oversight except For when it relates to something that Congress actually wants it to do like Assess the influence of foreign Investment in private Equity this means That the SEC could continue its Anti-everything Rampage This Rampage will likely continue until Gary's term is finished in 2026 or until He steps down to assume an even more Powerful position like treasury

Secretary which he has reportedly been Gunning for and a change in U.S Leadership could also stop the SEC in His tracks that could happen as soon as 2024 and if you happen to be wondering Which U.S presidential candidates are Pro-crypto we happen to have a video About that and the link will be down in The description And that is all for today's video so if You found it informative smash that like Button to let us know if you want to Make sure you continue being informed Subscribe to the channel and ping that Notification Bell if you want to help Inform others be sure to share this Video with them If you're accumulating crypto throughout This bear Market make sure you're doing So using an affordable exchange and Storing your coins and tokens on a Secure wallet the coin Bureau deals page Has up to forty thousand dollars in Airdrop bonuses on the best crypto Exchanges and huge discounts on the best Hardware wallets the link will be down In the description as always thank you For watching and I'll see you next time Till then behave yourselves and try and Be nice to each other Foreign


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