The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has outlined two paths the agency is taking to regulate the crypto industry. Meanwhile, a U.S. congressman is investigating whether Gensler helped FTX CEO Sam Bankman-Fried and his bankrupt crypto exchange on legal loopholes to obtain a regulatory monopoly.

SEC Chair Gensler on FTX's Undoing

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, talked about crypto regulation and the undoing of cryptocurrency exchange FTX in an interview with CNBC Thursday.

Without confirming whether the SEC is investigating FTX, the chairman explained that when crypto exchanges "mix together a bunch of customer money" without disclosure and "leverage borrowing against it," investors get hurt.

He was also asked about the watchdog going after Kim Kardashian which, on a relative basis, is a much smaller case than FTX. Gensler replied:

Look, I think that investors need better protection in this space. But I would say this, this is a field that's significantly non-compliant, but it's got regulation and those regulations are often very clear, and we have multiple paths.

"One path is working with those crypto exchanges, crypto lending platforms, and to get them properly registered and why that matters is that so the public is protected," he explained.

Another path is enforcement, Gensler emphasized. "We've brought, between my predecessor and the teams now at the SEC, at least 100 actions … and we've been very clear in these various enforcement actions." He also referenced the regulator's recent win against LBRY.