Congressman calls SEC Chair Gensler “singularly responsible” for FTX collapse as the latter aims at crypto

  • The Securities and Exchange Commission’s Chairman Gary Gensler stated his agency only needs more money and reach to regulate crypto.
  • Representative Ritchie Torres asked the Government Accountability Office to conduct an investigation into SEC concerning the FTX collapse. 
  • As per Torres, Gensler has left the SEC staff demoralized, with the attrition rate climbing to its highest in a decade.

FTX’s collapse was unprecedented. Retail and institutional investors took a hit along with  FTX’s creditors. However, according to a letter by Congressman Ritchie Torres, all of this could have been avoided had the Securities and Exchange Commission (SEC) and its Chairman Gary Gensler intervened earlier.

FTX collapse could have been prevented by the SEC

In a letter on Wednesday, Ritchie Torres of the Democratic Party asked the Government Accountability Office (GAO) to look into the conduct of the SEC in regard to FTX’s downfall. According to Torres, the federal agency and its chair, Gensler, failed to save the investors despite claiming authority.

In an interview with Yahoo Finance on Wednesday, Gensler stated that the SEC had enough disclosure and governance authority to regulate crypto companies. The chairman went on to say that the agency would only need more money and additional reach beyond the United States to practice authority.

Thus despite claiming such power, as per Torres, Gensler should have avoided a fiasco as huge as FTX. In the letter to the GAO, Torres stated.

“If the SEC has the authority Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history. One cannot have it both ways, asserting authority while avoiding accountability.”

He further added that Gensler is single-handedly responsible for the regulatory failures pertaining to the bankrupt exchange FTX. He even commented on Gensler’s failure as a leader.

Gensler stirring up mutiny within the SEC

According to Torres, Gensler is not the fondest of a person in the SEC, as his performance as the Chairman has left the staff demoralized. The letter noted,

“Mr. Gensler’s leadership has left the career staff at the SEC fundamentally demoralized to an extent rarely seen, with the SEC Inspector General reporting the highest attrition rate in a decade.”

Regardless, SEC continues to approach regulations on the crypto space head-on, all the while fighting Ripple in a lawsuit. 

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