(Bloomberg) -- Never miss an episode. Follow The Big Take daily podcast today.
Gary Gensler’s tenure as Wall Street’s top regulator is coming to an end, and the US Securities and Exchange Commission chair is reflecting on his time at the agency.In an interview with host David Gura, Gensler responds to his critics, discusses his concerns about AI, China and crypto — and shares the advice he gave President-elect Trump’s pick to replace him.Listen and follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcastsTerminal clients: click here to subscribe.
Here is a lightly edited transcript of the conversation:
David Gura: 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 2021, 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 Ferro 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.
Jonathan Ferro: Gary, what do you do for a group of investors that don't want your protection?Gary Gensler: Well, I'm going to be animated every day in this job by working families, and working families need the protection.
Gura: Gensler’s approach to enforcement — in the world of crypto, especially — made him unpopular. He 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 Gensler:
Donald Trump: On day one, I will fire Gary Gensler and appoint a new SEC chairman. I didn't know he was that unpopular. Wow, I didn't know he was that unpopular. Let me say it again. On day one, I will fire Gary Gensler. Woah.
Gura: Well, Trump will not have to do that. On November 21, 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.
TikTok User: Oh my God, it's finally here. Gary Gensler officially resigns from the SEC.
TikTok User: This demon has been torturing the entire crypto industry for like three to four years.
TikTok User: Literally regulating through enforcement and going after nearly every major crypto company in the United States.
Gura: 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 are leaving government, including Treasury Secretary Janet Yellen, and Secretary of State Antony Blinken.
Scarlet Fu: Let's go now to Bloomberg News David Gura, who is sitting down with the outgoing chair of the SEC over in Washington. David, over to you.Gura: Thank you very much and welcome to our listeners and viewers worldwide. I'm here with Chair Gary Gensler in his office in Washington, DC. Great to speak with you.
Gensler: Great to be with you, David.
Gura: 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 United States’ 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 Gura, and this is “The Big Take,” from Bloomberg News. Today on the show: an exit interview with the 33rd Chair of US Securities and Exchange Commission, Gary Gensler. His views on crypto, on AI, on China — and what advice he has for his successor.
Gura: 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 a fair amount of attacks, some vitriol. How have you processed all of that?
Gensler: You walk into this central square and you debate these important things for 330 million Americans. I've worked over the years with Hillary Clinton on a number of campaigns, and I remember Hillary saying once ‘if you're not willing to be attacked, you can't go into the public square and debate policy.’ And, 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 $120 trillion 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's what public policy is about.
Gura: You came into this job, you gave a big speech in which you analogized the crypto world to the wild west, I guess that makes you the sheriff. So, as you get ready to hang up your spurs, is it less of a wild — I'm really belaboring the metaphor — but is is it less of a wild west than it was as you leave this office.
Gensler: My daughters, if they ever watch this interview will ask, where are your spurs, Dad? I think that we've done some good things. Look, I came in, my predecessor, Jay 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 80 enforcement actions in this area. We've brought in about 100 in our four years. It was consistent. I've been around finance for over four decades. And everything in the markets trade on a mixture of fundamentals and sentiment at any given time. But I've never seen a field that's so much wrapped up in sentiment and not so much about fundamentals. And these 10,000 to 15,000 projects— many of them will not survive. They're like venture capital investments. They're not going to survive, but there'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 Sam Bankman-Frieds and the Do Kwons, where tens of billions of dollars were lost by investors.
Gura: 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 at MIT, and thought that you would be perhaps a champion of them. Has there been an evolution in the way that you approach crypto over that transition from academia to here, or while you’ve been here?
Gensler: Here's the evolution—Gura: People think you are somebody who’s adamantly opposed to crypto.
Gensler: 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 these new investment vehicles. But then when you're in this job, this is a chair of a five-member commission, over roughly 5,000 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.
Gura: On that note, we saw in this last election cycle, $135 million spent by crypto companies on races across the country.
Gensler: Did you notice that very few, if any, actually advertised on crypto?
Gura: I didn't note that.
Gensler: Just—
Gura: 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 races?
Gensler: I just think of everyday investors. I think it's very consequential to everyday investors that we put in place rules that insiders of companies, senior 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 put in place rules that they will have to wait 90 days. And why 90 days? Because then they might release that material non-public information. So I think that's what we really focused on and that everyday investors have benefited from that.
Gura: Let me pivot to risks and you've sounded the alarm about artificial intelligence at FSOC. You gave a big speech at Yale Law School. You did one at the National Press Club. It's something that you're, you're clearly thinking about.
Gensler: I even wrote about it when I was at MIT—
Gura: There you go—Gensler: —four and a half years ago.
Gura: 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, to the financial markets? Not having anything close to a robust regulatory regime for AI.
Gensler: 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—Gura: —Biceps and—Gensler: —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 markets, in terms of finance, I think about the challenges of the conflicts. 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.
Gura: Another challenge facing the agency? It could see its budget slashed under the incoming Trump Administration, which has promised to reduce spending on government agencies across the board. That’s in a moment.
Gura: 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.
Gura: 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 less staff?
Gensler: I think it would be unfortunate because we're already spread too thin. We get 40 or 50,000 tips, complaints and referrals a year.
Gura: A year.
Gensler: A year. Now, back to an earlier subject. I think 18% of those are from the crypto field. And at any given time, we only have the staff to maybe investigate some small portion, so we're constantly triaging.
Gura: Has there been an SEC DOGE summit? Has anyone working for that new Elon Musk, Vivek Ramaswamy outfit come to the agency to talk about potential changes or?
Gensler: I think you, you know, and it might sound familiar to what Tony Blinken told you. There's one president at a time. There's one commission at a time. I'm proud of this agency, but that which folks do after January 20, they’ll take up at that point in time
Gura: 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 helm of this agency?
Gensler: Paul and I did catch up. He knows this agency. He's worked at this agency.
Gura: For two chairmen, I believe.Gensler: And he was a commissioner for six years. And so I won't say all the things, it's a private conversation. But Richard Breeden was the first person to hire Paul into the agency. Richard was chair under President Bush number 41, 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 formers club.’ And you can take that a number of ways, but I took that as Richard's way of saying: Every day is such a privilege. Use it well. Use it on behalf of the American public. And so, that was my main advice to Paul.
Gura: A sort of big think 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 Jay Clayton to you. You had your own regulatory agenda. Now, we'll go presumably to a Paul Atkins one and he'll prioritize certain things, maybe push other things to the wayside he can prioritize. Investors love certainty. Is there an inherent lack of certainty in the way that we have financial regulation in this country that's detrimental?
Gensler: I think democracy is a very good thing. The American public gets to speak through their votes as to who sits in seats of consequence like I sit in. I think what's really important for, regardless of who's in this seat, is that you 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 dollar's 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 40% to 45% of the world's capital markets. Our stock market is $60 trillion dollars in size. The French stock market, the UK stock market, $3 trillion, $2 to $3 trillion. We have single companies that have market values more than that. Even the Chinese stock markets, maybe $12, $13 trillion. But we can't take it for granted. You gotta keep it good disclosure, free of fraud manipulation, and really have, as best you can, competitive all-to-all trading. And then markets go up, markets go down, and people get to decide what risk they want to take.
Gura: Lastly, what's next for you? Do you have plans for what you'll do come January 20 when you leave this job?
Gensler: I don't have anything to announce on this program. It really is a remarkable agency, and I want to hand it off well to the next team, and I'm very focused, of course, on the staff — the great staff here — over these next 10 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 when they join the formers club.
Gura: Chair Gensler, thank you very much. Thank you. Appreciate it. Thank you.
©2025 Bloomberg L.P.