SEC Chair Gensler talks crypto, faces GOP criticism in Senate Banking hearing

Securities and Exchange Commission Chair Gary Gensler was questioned by the Senate Banking Committee about the oversight of his department. Gensler's regulatory approach drew criticism from Republican Senator Tim Scott, who accused him of hindering pro-growth initiatives and potentially increasing costs for public companies with climate disclosure rules. Scott emphasized the need for a slower regulatory pace stating, "the breakneck pace you are pumping out regulations should not be applauded." Gensler was also asked about a judge's ruling in favor of Grayscale in its bid to convert its Grayscale Bitcoin Trust (GBTC) into an ETF. Gensler said his team is still reviewing the decision.

Yahoo Finance's Jennifer Schonberger delves into the details of the hearing.

Video Transcript

- Securities and Exchange Commission Chair, Gary Gensler, is testifying on oversight of his agency before the Senate this morning. We're about an hour into the hearing. Yahoo Finance's Jennifer Schonberger joins us with the highlights so far. Jennifer.

JENNIFER SCHONBERGER: Hey there, Rachelle, yeah, listening this morning, Republicans taking Chair, Gensler, to task over his oversight. Ranking member Republican, Tim Scott, saying he has been waiting since February 14th to talk to Gensler. Say criticizing the chair for failing on his obligation to adhere to congressional oversight. He said it's especially troubling that the SEC has failed to implement pro-growth rules instead only creating hurdles pointing to the SEC's proposed climate disclosure rule, saying that that could quadruple costs for a public company.

Scott saying, quote, "The breakneck pace you are pumping out regulation should not be applauded. How do you square your mission with upheaval of market functioning?" Gensler for his part defending his agency saying that they only rank fourth amongst a handful of past predecessors, including behind Republican Chair, Jay Clayton.

Now, Chair Gensler has received only a couple of questions so far on crypto, though Gensler saying that the field is rife with noncompliance and the 44 years that he's been around financial markets, he's really never seen anything to this extent calling it, quote, "daunting." Also Gensler has been peppered with questions on those climate disclosure rules. Of course, Republicans oppose to that.

But interestingly, Democratic Senator, Jon Tester, also taking Gensler to task on that saying that those surveys and rules are actually trickling down to local Montana farm ranchers, asking Chair Gensler to make sure that this is avoided. Gensler said he is talking to staff about this. Rachelle.

- Well, certainly a busy day in DC, Jennifer. I mean, the US deficit also making some news here, it's projected to roughly double this year. That's according to a committee, the Committee for a Responsible Federal Budget. What can you tell us there?

JENNIFER SCHONBERGER: Yeah, that's right. So the federal deficit expected to double to $2 trillion this year, up from $1 trillion last year. That according to a new estimate out from the Congressional Budget Office on Monday. Why? Revenues are down 10%, outlays up 3%. We are going to get an official estimate on that from the Treasury in mid-October.

Of course, house Republicans really using this as a political football to try to lock in those spending levels. We saw them go to loggerheads over this earlier this year. And in the remaining two weeks of September as we have that countdown clock to October 1st, this issue expected to rear its head again here in Washington. Rachelle.

- It feels like a broken record. We're back in this same spot again under pressure.

JENNIFER SCHONBERGER: We've seen this movie before, right?

- Thanks for getting us up to speed. Exactly. So far, good ending so far. Let's hope it stays that way. Our very own Jennifer Schonberger. Thank you so much.