According to a Reuters report, President-elect Joe Biden is expected to name Gary Gensler as chair of the U.S. Securities and Exchange Commission (SEC). Yahoo Finance’s Brian Cheung breaks down the latest.
MYLES UDLAND: We are just one week away from the inauguration of President-elect Joe Biden, and we continue to see his cabinet fleshed out. Major appointments being made over the last couple of weeks. And we now know who will be tapped to lead the SEC under Joe Biden, and that is Gary Gensler. Brian Cheung joins us now for a bit more on the import of this appointment, Brian, and maybe some thoughts on the direction the SEC might take in the Biden administration.
BRIAN CHEUNG: Well, as you mentioned, it was reported by Reuters, still yet to be confirmed by the Biden administration, that it will be Gary Gensler who will be heading the Securities and Exchange Commission in the coming administration, obviously pending Senate confirmation. He was a former chairman of the Commodity Futures Trading Commission under Obama, the CFTC. He started his career at Goldman. So he's a Goldman guy, which actually is kind of notable given how a lot of the Biden administration nominees so far appeared to be from BlackRock, at least in the financial space.
Now as far as Gensler himself, he did serve in the US Treasury under the Clinton administration. And he really cut his teeth at the CFTC working on implementing that 2010 Dodd-Frank Act after the financial crisis, specifically on the regulation of derivatives, which is really in the CFTC's wheelhouse. Now as the head of the SEC he could really steer a lot of attention towards crypto. That's a space that he's been studying at length during his current tenure at the Massachusetts Institute of Technology, MIT. That could be something that attracts a lot of attention, given the rise in Bitcoin. So a lot of interesting things to watch there with Gensler.
MYLES UDLAND: Well, yeah, I mean, Brian, I think that's kind of where everyone's mind goes first now when it comes to financial regulation. I think there are a lot of things that the SEC could or ought to do in terms of regulating normal publicly listed companies, if we want to call them that. But certainly how they treat or don't treat cryptocurrency is the big question.
And it seems unlikely that we're going to get through the next decade without some major resolution on just where some of these assets sit, in terms of are they securities? How should they be custodians? Who is responsible for losses in this space? All these questions that right now kind of remain Wild Westy, I guess, when it comes to cryptocurrencies.
BRIAN CHEUNG: Yeah, absolutely. And I that when we talk about cryptocurrency, we have to understand that the CFTC, which is where Gensler was during the Obama administration and where he is now, or rather headed at the SEC, they have different types of roles. So when you think about the CFTC, for example, they have a lot more specific jurisdiction in the ETF space.
For example, we've heard that from the likes of Heath Tarbert, who is the current or at least the most recent head at the CFTC under the Trump administration. The framework that the Trump administration put in place could definitely lead to some sort of interesting starting ground for the next CFTC head. But as far as Gensler, he's going to be heading to the SEC side, which is really going to be enforcing, for example, just a broad treatment of the cryptocurrencies themselves, not necessarily other types of more complex situations, like ETFs, for example.
So I think that Gensler is going to have a broader authority over this space. And it does seem like probably based off the commentary that we've heard over the past few years during his time at MIT, he has appeared to have a more friendly attitude and approach towards that space. Again, interesting to watch once he does get confirmed, or at least we need to hear from the Biden campaign first that this is actually official.