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Crypto: SEC Chair Gary Gensler calls on Congress to provide more funding for oversight

Yahoo Finance's Jennifer Schonberger joins the Live show to break down SEC Chair Gary Gensler's testimony on regulations for cryptocurrencies and digital assets amid market sell-offs.

Video transcript

SEANA SMITH: SEC Chair Gary Gensler on the hot seat on Capitol Hill today issuing a warning for those that are investing in crypto. Jennifer Schonberger is here with the details. Jennifer.

JENNIFER SCHONBERGER: Good afternoon, Seana. That's right. SEC chair Gary Gensler says that they need more money from Congress to police cryptocurrencies during a House hearing this morning on the agency's budget, while also stressing again that cryptocurrencies are highly speculative.

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GARY GENSLER: But right now, the investing public in all communities are not well protected. In terms of what this committee can do is help us get-- again, we're not trying to grow really significantly, but resources to grow at least 6% and grow our enforcement arm in this space.

JENNIFER SCHONBERGER: Gensler emphasized again that he believes the SEC has jurisdiction over the vast number of cryptocurrencies, but that Bitcoin may be a commodity token. He said if crypto players are raising money from the public, then there should be full and fair disclosure, which Gensler says is missing now. The Wall Street cop reiterated that crypto exchanges need to register with the SEC and warned the public about investing in crypto now.

GARY GENSLER: These exchanges are trading against their customers. They literally are making markets versus their customers. They're holding what's called the private key. If they lose them, or there's hacks, guess what? The public will just have to get in line, like they're in bankruptcy court.

JENNIFER SCHONBERGER: Now Gensler's testimony this morning comes after the SEC chair sent a stern warning on Monday to the investment public about investing in cryptocurrencies on the back of that big run in stablecoin Terra and sister token, Luna, which happened last week. And as for speculation from analysts that that run could conjure more immediate action from Washington to regulate cryptocurrencies, we have yet to see specific swift action from Gensler or any of the other agencies or policymakers in Washington. Guys.