This week, Gary Gensler received a portion of criticism at a US Congressional hearing. Some politicians emphasised the strangeness of the SEC chief’s position, as well as the sheer volume of problems he creates for the industry.


The speech by Democrat Richie Torres was particularly iconic. First, he forced Gensler to admit that ordinary tickets to a local sports team's game are not unregistered securities, even though they are able to rise in value and are often resold. Torres then asked why, in that case, the SEC had caused problems for the Stoner Cats project, which sold NFTs for access to the animated series. Gensler couldn't find anything to answer.


SEC Chairman Gary Gensler

Overall Gary looked very unconvincing under the pressure of Congressional representatives.

What will happen to the cryptocurrency market?

The crypto industry needs transparency – especially given past crises in the sector. For example, several major cryptocurrency companies went bankrupt in 2022: we’re talking about the theft of FTX, Three Arrows Capital, Celsius, and Genesis.

As a result, the former head of crypto exchange FTX, Sam Bankman-Fried, was sentenced to 25 years in prison for fraud. And former Celsius CEO Alex Mashinsky expects his trial to begin early next year.

Former FTX cryptocurrency exchange chief Sam Bankman-Fried

Gensler emphasised the danger of a repeat of similar bankruptcy cascades in the future. Here’s his quote, as cited by The Block.

Look at the favourites of this industry two years ago. Many of them are now in jail, and I’m not just talking about Sam Bankman-Fried. There are tens of billions of dollars in losses and bankruptcies and other problems. No innovative field in America can survive without building trust and protecting investors and consumers.


It is often noted in the crypto community that it was Gary Gensler who failed to prevent the collapse of the trading platform. This is significant given the SEC head's meetings with Sam Bankman-Fried, the former head of FTX. The SEC's numerous lawsuits against the blockchain company are believed to be an attempt by Gensler to rehabilitate himself after he missed the FTX scam.


FTX cryptocurrency exchange logo and the FTT exchange rate

He added that the industry cannot survive for long without these measures. According to Gensler, most cryptocurrencies are ostensibly securities, which is why he urged companies to register with the SEC.

However, along with this, a representative of the regulator confirmed that Bitcoin is an exception. Here is his quote.

My predecessor and I have stated that Bitcoin is not a security.


Note that Gensler has traditionally avoided answering about whether popular cryptocurrencies like Etherium belong in the securities category when asked about it in Congress. This happened in April 2023, when Gary was directly asked whether ETH could be considered such an asset.


SEC head Gary Gensler

When asked about presidential candidates Kamala Harris and Donald Trump’s views on cryptocurrencies, Gensler refrained from commenting. Earlier this week, Harris said her administration would “encourage innovative technologies like artificial intelligence and digital assets.”

Trump’s stance is more global: he has promised to end “illegal and anti-American pressure” on the industry, promote niche development and fire Gary Gensler as SEC chairman on the first day of his new tenure. Plus, the day before, he unveiled his family’s crypto project World Liberty Financial and conducted a Bitcoin transaction, becoming the first president to ever interact with the BTC blockchain.

However, there is some good news in the coin niche. According to the latest report from analyst platform Immunefi, the third quarter of this year saw a smaller amount of losses from malicious activity. The amount totalled $413 million.

The losses are 28 per cent lower compared to the second quarter and 40 per cent lower against the backdrop of the third quarter of 2023. For the year as a whole, the amount stolen was more than $1.3 billion, down 4 percent from the same period last year.

Top incidents with losses in 2024

According to the DeFiLlama platform, nearly $90 billion in Web3 protocols have been blocked. The main target for hackers remains the field of decentralised finance or DeFi.

In total, this area accounts for 31 of the 34 incidents identified by Immunefi in the third quarter. However, centralised platforms suffered far more significant monetary losses. We’re talking about 74.8 per cent of the total losses or $309 million respectively.

Losses in the DeFi and CeFi sectors

The two largest hacker attacks resulted in 69.5 per cent of the total loss of funds for the quarter. The largest attack was the hack of Indian crypto exchange WazirX on 18 July worth $235 million. Another $52 million was stolen from Singapore-based exchange BingX on 20 September.

Comparison of losses from hacker attacks on cryptocurrency exchanges

July proved to be the toughest month with losses totalling $282 million, with losses dropping sharply to $15 million in August. In September, losses rose again to $116 million.

In total, the two incidents recovered $14.9 million in stolen funds. The Ronin Network and ShezmuTech hacks were the names.

Volumes of recovered funds in the cryptocurrency industry the day before

Most of the losses were due to hacker attacks, which accounted for 99.3 percent of losses ($409.9 million) in 31 incidents. Fraud and developer scams brought attackers only 0.7 per cent of the total losses ($3.1 million.


Overall, Gary Gensler continues to push the coin niche with the tools available to him. In addition, it's worth noting that the head of the SEC once again called cryptocurrencies unregistered securities, although back in the middle of the week, Republican Tom Emmer chided Gary for using the made-up term "cryptocurrency securities." With that in mind, we can assume that the SEC will continue its crackdown on crypto, with the same likely to be true if Kamala Harris wins the presidential election.