Sam Bankman-Fried and the SEC

The Wall Street Journal comments on Sam Bankman-Fried and the SEC

Sam Bankman-Fried charmed investors and politicians, but he wasn't so fortunate with a federal jury. On Thursday the former FTX crypto-exchange kingpin was convicted of seven counts of fraud and money-laundering.

Mr. Gensler has since spun Mr. Bankman-Fried's fraud as a cautionary tale of the crypto "wild West." But regulators and prosecutors don't need new powers to charge fraud under existing U.S. laws. And while Mr. Gensler charged crypto companies for marketing unregistered securities and operating unregistered trading platforms, that didn't stop Mr. Bankman-Fried's crimes.

Mr. Bankman-Fried scoffed last November to a reporter at Vox that regulators "don't protect customers" and "can't actually distinguish between good and bad." He may have demonstrated his point. One question for Congress to investigate is whether Mr. Gensler's preoccupation with expanding his regulatory and enforcement power caused the agency to overlook the FTX fraud in plain sight.