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Gary Gensler has less than two weeks left as Wall Street's top cop as the chair of the US Securities and Exchange Commission. He took the job in April of twenty twenty one, not too long after the game Stop Short Squeeze, and during Gensler's tenure, the SEC has taken action against a number of high profile crypto executives. He's focused a lot on protecting investors, which is central to
the agency's mission. Bloomberg's Jonathan Farrow asked Gensler about that in the context of crypto and meme stocks in his first interview with Bloomberg as SEC chair, just a few months after he.
Started, Gary, what do you do for a group of investors that don't want your protection. Well, I'm going to be animated every day in this job by working families, and working families need the protection.
Gensler's approach to enforcement in the world of crypto especially made him unpopular. Maintains most cryptocurrencies are in fact securities and therefore are subject to regulation by the SEC. President elect Donald Trump campaigned in part on getting rid of Ginstler. On day one, I will fire Gary Gensler and appoint a new SEC chair.
I didn't know who's that unpopular. Well, I didn't know who's that unpopular.
Let me say it again. On day one, I will fire Gary Ginstler, whoa Well Trump will not have to do that. On November twenty first, Gensler announced his decision to step down on inauguration Day at noon, which led to much rejoicing in the world of crypto. At least on TikTok, Oh my god, it's finally here. Gary Gandler officially resigns from the SEC. This demon has been torturing the entire crypto industry for like three to four years, literally regulating to re enforcement and going off to nearly
every major crypto company in the United States. This week I went to Washington to interview the SEC chair. It's the third in a series of conversations I've had with members of President Biden's administration who were leaving government, including Treasury Secretary Jennet Yellen and Secretary of State Anthony Blincoln.
Let's go down to Bloomberg News as David Gura, who is sitting down with the outgoing chair of the SEC over in Washington.
David Ordio. Thank you very much, and welcome to our listeners and viewers worldwide. I'm here with Chergary Gensler in his office in Washington, d C. Great to speak with you, Great to be with you, David. Part of it was live on television and radio, but we kept the conversation
going when the cameras cut away. I asked him to reflect on his time as the US's top securities regulator and what it's like to be called out by the past and future president along with the world's richest man, and what's next for the SEC I'm David Dura, and this is the Big Take from Bloomberg News Today. On the show, an exit interview with the thirty third Chair of the US Securities and Exchange Commission, Gary Gensler, his views on crypto, on AI, on China, and what advice
he has for his successor. I want to start first just by asking you how you're feeling here with less than two weeks left in your term. You have been subject to fair amount of attacks, some vitriol. How have you processed all of that?
You walk into this central square and you debate these important things for three hundred and thirty million Americans. I've worked over the years with Hillary Clinton on a number of campaigns, and I remember Hillary saying once it's like, if you're not willing to be attacked, you can't go into the public square and debate policy. And so I think it's part of our great democracy. It's a great
privilege to be in a role like this. But what's remarkable about this role is it oversees the one hundred and twenty trillion dollars capital market, which touches everything in our economy. Because you've got to raise money for most of what we do in our economy, and people save you ask about the attacks and things like that.
That's what public policy is about.
You came into this job. You gave a big speech in which you analogize the crypto world to the wild West. I guess that makes you the sheriff. So as you get ready to hang up your spurs, jeez, less of a wild I've really been laboring the metaphor. But is it less of a wild West than it was as you leave this office.
My daughters, if they ever watched this interview, wells, we're your spurs, dad. I think that we've done some good things. Look, I came in. My predecessor, Jake Clayton, who was in this office, had also tried to address this new emerging part of finance. Jay was trying to address it, and he brought eighty enforcement actions in this area. We've brought in about a hund in our four years.
It was consistent.
I've been around finance for over four decades, and everything in the market's trade on a mixture of fundamentals and sentiment at any given time. I've never seen a field that's so much wrapped up in sentiment and not so much about fundamentals. And these ten to fifteen thousand projects, many of them will not survive. They're like venture capital investments.
They're not going to survive. But they're also a fair number of small pump and dump schemes and other things in this And of course we've lived through a few years where they became notorious, but they're in jail. The sambank and Freeds and the do Kwon's where tens of billions of dollars were lost by investors.
Settle something for me, because I think when you came into office, a lot of people looked at your immediate background, having researched a lot of digital assets, worked on them in MIT, and thought that you had perhaps a champion of them. Has there been an evolution in the way that you approach crypto over that transition from academia to hear or while you've been here, people think you are somebody who's adamantly opposed.
To here's the evolution.
When you're in academia or when you're not in this job, you can study something and observe it as I did, and try to teach students what's the value proposition about this new technology? What's the value proposition of this new investment vehicles? But then when you're in this job, this is a chair of a five member commission or roughly five thousand people. That's a law enforcement agency, and this is a field rife with challenges and non compliance with
the securities laws. You take an oath of office, you do what you can to protect the investing public.
On that note, we saw in this last election cycle one hundred and thirty five million dollars spent by crypto companies on races across the country.
Did you notice that very few, if any, actually advertised on crypto?
I didn't note that.
Just does that give you concern the role that the crypto industry is playing, not just within these halls, but across Washington, across the country in those.
Rus I just think of every day investors. I think it's very consequential to every day investors that we put in place rules that insiders of companies, seniors executives can no longer just file a plan on a Monday when they had material non public information and sell their stock on that same Monday. But we've put in place rules that they will have to wait ninety days. And why ninety days, because then they might release that material non
public information. So I think that's what we really focused on and that every day investors have benefited from that.
Let me pivot to risks, and you've sounded the alarm about artificial into eleigence at f SoC, you gave a big speech at a law school, you did one at the National Press Club. It's something that you're clearly thinking.
I even wrote about it when I was at MITRE you go four and a half years ago.
We are facing now four years where one geopolitical consultancy says we're having AI unbound, that there will be less regulatory interest in AI. What are the consequences of that. As you see, it's to the financial markets not having anything close to a robust regulatory regime.
For AI, it's very dramatic advancements. I think it's going to transform so many parts of our economy in good ways. We are automating this, and the Industrial revolution was automating this and this, And for those that couldn't see, I meant we're automating our brains and not our biceps, our biceps and our thighs. And I think it will boost productivity, but there'll be a lot of disruptions in terms of
the capital mark, in terms of finance. I think about the challenges of the conflicts if your robo advisor, are they giving you advice on behalf of the asset manager or you?
And who are they putting first?
And it could be in some opaque mathematical formula deep inside the algorithm.
Another challenge facing the agency it could see its budget slashed under the incoming Trump administration, which is promised to reduce spending on government agencies across the board.
That's in a moment.
SEC chair Gary Gensler has already announced he's leaving his job at noon on inauguration day. It's been well established that President elect Trump would not have left him in the job. I wanted to ask Gensler about Trump's plans for the SEC and other agencies. The ethos, it seems, of this incoming administration is to cut staff and cut bureaucracy here in Washington. What would that mean for this agency if you had a less stout.
I think it would be unfortunate because we're already spread too thin. We get forty or fifty thousand tips, complaints and referrals a year, a year a year now back to an earlier subject. I think eighteen percent of those are from the crypto field, and at any given time we only have the staff to maybe investigate some small portions. So we're constantly trioshing.
Has there been an SEC DOGE summit, and has anyone working for that new Elon musk I vet Romaswami outfit come to the agency to talk about potential changes or.
I think you.
Know, and it might sound familiar to what Tony Blinkoln told you. There's one president at a time, there's one commission at a time. I'm proud of this agency, but that was folks do after January twentieth'll take up at that point in time.
Looking ahead, Have you had a conversation with Paul Atkins, your presumptive successor here, and if so, what did you stress to him is most important to think about as he would take over the High Agency.
Paul and I did catch up.
You know, he knows this agency, He's worked at this agency, and he was a commissioner for six years, and so I won't say all the things a private conversation, but Richard Breden was the first person to hire Paul to the agency. Richard was chair under President Bush number forty one. And I shared with Paul the advice that Richard gave me coming into this job. And Richard said, remember, every single day in the job is one day closer to when you will join the former's club. And you can
take that a number of ways. What I took that as Richard's way of saying, every day such a privilege. Use it well, use it on behalf of the American public. And so that was my main advice to Paul.
A sort of big thing question just about financial regulation and the US's role in the world. You've said, though the US equity markets are the deepest, most liquid in the world. We can't take that leadership for granted at this moment of transition. There will be some I imagine, who wonder just about the certainty of regulation in this country and how the US holds on to that position of prominence or preeminence.
In the world. Are we doing ourselves a disservice?
Are we shooting ourselves in the foot by having these kind of radical changes in leadership of regulatory agencies? So it went from Jake Clayton to you, you had your own regulatory agenda. Now we'll go, presumably to a Paul Adkins one, and he'll prioritize certain things, push other things to the wayside.
Investors love certainty.
Is there an inherent lack of certainty in the way that we have financial regulation this country?
That's detrimental.
I think democracies are a very good thing. The American public to speak through their votes as to who sits and seats of consequence, like is it in? I think what's really important for regardless of who's in this seat, is that it can't take for granted that we're going to be number one and that their capital markets might be the deepest and liquid now. But if they get more costly, if they get rickety and unstable in any way, if.
They favor certain folks.
Rather than having a really competitive environment where you have equal and open access to the capital markets, full access, I should say, and fair access, then we could give up our mantle. And it relates to the dollars role in the world. A lot of people talk about the dollar as a reserve currency. I say, that's interesting, important, maybe, but it's really about our capital markets that are forty
to forty five percent of the world's capital markets. Our stock market is sixty trillion dollars in size, the French stock market, the UK stock market three trillion, two to three trillion. We have single companies that have market values more than that. Even the Chinese stock markets maybe at twelve thirteen trillion. But we can't take it for granted. Got to keep it good disclosure, free of fraud, manipulation, and really have as best you can and competitive all
to all trading. And then markets go up, markets go down, and you know, people get to decide what risks they want to take.
Lastly, what's next for you?
Do you have plans for what you'll do come January twentieth, when you leave this job.
I don't have anything doing Nolyx on this on this program. It really is a remarkable agency, and I want to hand it off well to the next team. I'm very focused, of course on the staff, the great staff here over these next ten days as well, and then hand it over to others that will have the privilege. As Richard Breeden said that each day is one day closer to one they're joined the former's club.
Sure, Gunsler, Thank you very much, Thank you appreciate it.
Thank you.
This is the Big Take from Bloomberg News. I'm David Gura. This episode is produced by David Fox and Jessica Beck. It was mixed and sound designed by Alex Sagura in fact Check by Adriana Tapia. Our senior producer is Naomi Shavin, who also edited this episode with Aaron Edwards and Meghan Howard. Our senior editor is Elizabeth Ponso. Our executive producer is the Cole Beamster Board Sage Bauman is Bloomberg's head of podcasts. If you liked this episode, make sure to subscribe and
review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back next week. M