US Senate Questions SEC Member Gensler Over Climate Law, Cryptocurrency Situation

US Senate Questions SEC Member Gensler Over Climate Law, Cryptocurrency Situation

By Pete Schroeder and Michael Price

WASHINGTON (Reuters) – U.S. Securities and Exchange Commission Chairman Gary Gensler defended his agency’s stance on cryptocurrencies and pushed for the inclusion of climate risks in public company disclosures before the U.S. Senate Banking Committee on Thursday.

Gensler appeared before the committee to perform its usual oversight duties, but the hearing comes at a time when Republicans are frustrated with his schedule. They claim that he overstepped his authority with a widespread attack on the US capital markets and adopted a hostile attitude towards the financial industry.

But in prepared testimony released before the hearing, Gensler insisted his new rules were necessary to ensure that US capital markets remained the global “gold standard”.

Democratic Senator Sherrod Brown praised Gensler’s ambitious agenda. “If Wall Street and its allies complain, it probably means you’re doing your job,” he said.

Republicans are particularly concerned about a draft SEC rule requiring public companies to disclose climate-related risks, including greenhouse gas emissions. Corporate groups say they are overburdened and beyond agency authority.

“The cost of compliance will be more material to the investor than the information itself,” Pat Toomey, the committee’s chief Republican, said in his opening remarks.

He also warned that the US Securities and Exchange Commission should be “nervous” about legal challenges in light of a recent Supreme Court decision to limit the EPA’s power, which some legal experts say undermines the SEC’s authority over its climate rules.

John Tester, a Democratic senator from Montana, has also raised concerns about the potential impact of the climate rule on small business owners such as farmers who could be implicated by its requirement for public companies to disclose emissions in their supply chains.

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But Gensler, in his testimony, said the rule would provide the necessary clarity and consistency on an issue important to investors and would be articulated by some companies under disparate frameworks, and later added that the agency was considering all comments.

Cryptocurrency cash

Republicans have also pressured Gensler over what they see as his increasingly tough stance on cryptocurrency oversight.

Gensler made headlines last week when he said crypto firms may need to have multiple filings with the SEC and split their operations into separate legal entities.

Such “elaboration” could enhance investor protection and protect against conflicts of interest, Gensler said. He added that SEC employees have been working with traditional market brokers interested in entering the cryptocurrency market, and urged Congress not to inadvertently undermine existing investor protections while drafting crypto legislation.

Despite this, Tommy said the US Securities and Exchange Commission (SEC) had failed to provide regulatory clarity in the crypto market and accused the SEC of falling asleep while driving as crypto lending platforms Celsius Network and Voyager Digital collapsed this summer. , leaving thousands of retail customers unable to access their assets. .

Gensler also took a cautious tone about the recent deal between US and Chinese officials on auditing Chinese companies listed in the US, noting that the agreement is only meaningful if US officials are allowed to fully investigate the Chinese auditors.

He warned that nearly 200 companies would still face the possibility of trade restrictions in the United States if that did not happen.

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