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All eyes on SEC Chair Gary Gensler during Senate testimony

On Tuesday, Securities and Exchange Commission Chairman Gary Gensler testified to lawmakers about a policy agenda that could stir up trouble for big corporations. Yahoo Finance's David Hollerith shares the details.

Video Transcript

- SEC chairman Gary Gensler is testifying in front of the Senate Banking Committee as we speak. The crypto faithful are surely tuning in, as Gensler has been making the rounds and sharing his views on the industry. Yahoo Finance's cryptocurrency reporter David Hollerith is here with more. David, good to see you here this morning. So take us through this. What is the-- how is Gensler being viewed right now in the crypto community?

DAVID HOLLERITH: Yeah, hey, Brian. Well, so his message, essentially, his remarks for this testimony have been that crypto is the Wild West and buyers should beware. So I think a lot of people in the cryptocurrency space, you know, they're a little bit weary because, for years, you know, they have wanted more regulation, more clarity as they move on to try and launch these products. And obviously, they're-- you know, it's a $2 trillion industry now, and you know, they've spent a lot of time moving these products very fast. And in the last year, you know, we've seen this industry grow so much that, really, I think there's a lot of question around the regulatory framework. So, yeah.

- Yeah, most definitely a lot of attention being paid. You know, it strikes me, David, as we watch this, start to watch this hearing, a lot of these hearings that you see on the Hill, nothing really comes of them, right? They're just a sort of a discussion. They're a chance for members of Congress to grandstand, for lack of a better word, and then nothing happens. In this case, however, because Gensler has the force of a regulator, because he has sort of clout in the industry, you could actually see him sort of signaling to the market various things in his comments. Do we have any inkling of what he could say and what he could signal?

DAVID HOLLERITH: Yeah, sure. It's-- so you know, I think a lot of people do expect these sort of hearings to be very rhetorical. And you know, again, Chair Gensler, he's laid out what he said, and he's saying that it's the Wild West, and somebody needs to come in and do something. And you know, I think the question that a lot of members of Congress will probably pose back to him is whether or not it needs to be the SEC regulating all of the cryptocurrency space.

So I think a great example are the exchanges. Now last week, we saw Coinbase, Coinbase's CEO, Brian Armstrong, sort of came out about having, you know, what he called over Twitter as sort of a sketchy interaction with the SEC. And they were going after lending products, which are much more arguably in the lens of the SEC.

But I think the question-- a much larger question around stablecoins or these exchanges that have-- you know, they're completely unregulated and they have a lot of volume that, you know, arguably could be fake. There's been research that shows that. And I think that a lot of regulators are sort of looking at each other, and they're trying to understand who's supposed to be responsible for that. So I think that Gensler will be-- he'll be asking for more resources. And it'll be interesting to see Congress's reception.

- David, real quick, unrelated to this, ARK Invest's Cathie Wood I think garnering some headlines on comments she made about Bitcoin yesterday, looking for a price eventually of 500,000. You know, as someone who covers the crypto space, do those type of comments by an influencer like a Cathie Wood, does that still move markets?

DAVID HOLLERITH: I mean, yeah, I think it does. It's a much larger market, if we're just thinking about Bitcoin, than it was, you know, a year ago or even a few months ago. But if we think about May, you know, Elon Musk's situation tended to-- you know, most people agree, him saying that Tesla would no longer accept Bitcoin because of its environmental impact. I think that, you know, I think a lot of people agree that that has moved markets, along with sort of news out of China. So it is still a very new market, in a way.

And compared to something like the stock market, you expect to see, obviously, very volatile moves. So you know, I think something like a Cathie Wood coming out and saying something like that can definitely have positive ramifications for the crypto space, but it's hard to tell because there are so many other influencers, if you will, who are at play. And you know, I think Gary Gensler has become quite the character and influencer in the crypto space, hate him or love him.

- Yeah, if Elon Musk is number one crypto influencer, Gary Gensler is certainly right there. Well, you get back to the testimony. Yahoo Finance's cryptocurrency reporter, David Hollerith. Good to see you.