Durbin Questions SEC Chair On Crypto At An Appropriations Subcommittee Hearing

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) today, in a Senate Appropriations Financial Services and General Government (FSGG) Subcommittee hearing on the Fiscal Year 2024 (FY24) budget, questioned U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler about the risks of cryptocurrency.  In 2022 alone, fraud schemes involving cryptocurrencies totaled more than $9 billion.  One in five Americans is estimated to have invested in or traded cryptocurrency. 

“This is an industry, which you have said is, ‘rife with fraud, scams, and abuse,’” Durbin said.

Chair Gensler confirmed that it is an industry ‘rife with fraud, scams, and abuse.’  

“I could go through the list of outrages involved in this industry… They spend billions on a sports arena or stadium naming rights deals to gain misguided credibility with everyday Americans, manipulate prices by creating phony tokens with no underlying value, fail to protect and segregate investor funds…  This is happening over and over again.  This doesn’t sound like America.  What’s missing here?” Durbin asked.

Chair Gensler responded that the American public is not getting the proper disclosure to make their investment choices and “the companies operating in this space are bundling and comingling services that we [the SEC] would never allow.”  He also went on to say there is a number of bad actors in the crypto field preying on U.S. investors. 

“What’s the best way for us to protect American consumers from cryptocurrency in the future?” Durbin asked. 

Chair Gensler said they have robust authorities at the SEC, however, they could also use more resources.

Video of Durbin’s remarks from the hearing is available here.

Audio of Durbin’s remarks from the hearing is available here. 

Footage of Durbin’s remarks from the hearing is available here for TV Stations. 

Durbin continues to raise concerns about cryptocurrency.  In March, he questioned the Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam about the collapse of FTX—one of the world's largest crypto trading platforms.  Durbin also previously spoke on the Senate floor highlighting the dangers it poses to personal finances and retirement.  Last year, Durbin, along with U.S. Senators Elizabeth Warren (D-MA) and Tina Smith (D-MN), urged Fidelity Investments to reconsider their decision to allow 401(k) plan sponsors to offer plan participants exposure to Bitcoin, a highly volatile and risky digital asset.  Fidelity is one of the largest 401(k) providers with more than 32 million Americans and 22,000 employers who trust Fidelity Investments with their workplace retirement accounts and employer-sponsored plans.  The Senators’ November letter followed aletter they sent to Fidelity on July 26, 2022.