That FTX hadn’t registered with the SEC doesn’t let Mr. Gensler off the hook. For months he’s claimed to have authority over crypto and warned about self-dealing at their exchanges. Why didn’t he investigate the company? That would have given the SEC records of FTX’s sloppy bookkeeping and perhaps its alleged fraud.
A charitable explanation is that he considered his progressive regulatory agenda a higher priority, including a climate rule requiring public companies to disclose their greenhouse-gas emissions. An SEC inspector general report in October warned that Mr. Gensler’s aggressive rule-making agenda was overwhelming staff and diverting resources from investor protection. It’s also likely that Mr. Bankman-Fried’s $36 million in donations to Democratic causes bought him political protection.
A cynic might wonder if Mr. Gensler was waiting for a crypto disaster to serve as the impetus for Congress to grant him authority to regulate the industry aggressively. Increased regulation wouldn’t necessarily have prevented the FTX crack-up, though it would have raised the barriers to entry for competitors, as Mr. Gensler noted in an MIT lecture on crypto-regulation.
Source: Where Was Biden’s SEC Sheriff on Sam Bankman-Fried? – WSJ