December 2, 2025 • 7 mins
US regulators will continue looking at the recent hours-long outage of the Chicago Mercantile Exchange, former Securities and Exchange Commission Chair Gary Gensler said. He spoke with Bloomberg's Joe Mathieu,
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. We've been watching bitcoin
almost as much as stocks lately because it's been so
intrinsically tied to the markets. Remember when it was supposed
to be its own universe. That was the whole point
the decentralized cryptocurrency. It is bouncing back today, up fifty
four hundred dollars in approaching ninety two thousand dollars a coin.
(00:25):
So maybe it bottomed unclear as we've had multiple folks
including Mike mcglohe at Bloomberg Intelligence predict another crypto winter.
Michael Sailor also preparing for one at Strategy. Despite the love,
this administration has shown the embrace of the crypto industry
as we remember the ways with Donald Trump since he
(00:47):
took office.
Speaker 2 (00:48):
Listen last year, I promised to make America the bitcoin
superpower of the world and the crypto capital of the planet.
With the right legal framework, institutions large and swow liberated
to invest, innovate, and take part in one of the
most exciting technological revolutions in modern history. For years, you
(01:09):
were mocked and dismissed and counted out. You accounted out
as little as a year and a half ago, But
this signing is a massive validation.
Speaker 1 (01:20):
A massive validation as we watch the gyrations in the
crypto market. Pleasure to spend some time with Gary Gensler
as we consider the crypto space regulations and the plumbing
in the market. He's with us live now, former Chair
of Course of the Securities and Exchange Commission, Professor of
the practice at MIT Sloan School of Management. Mister Gensler,
(01:41):
Welcome back to Bloomberg TV and radio. Is that you
buying the dip in bitcoin?
Speaker 3 (01:48):
Joe? It's good to be back and good to be
with all of your viewers. But now I'm not participating
in that market.
Speaker 1 (01:59):
Well, what do you think of this? We've spent a
lot of time talking about this when you were in
the job at the SEC and the many warnings that
you made about this potentially risky asset, and we're witnessing
a reckoning in the marketplace right now. What do you
think is behind it?
Speaker 3 (02:16):
Look, I think it's a risk asset. In the American
public and the worldwide public has been fascinated with cryptocurrencies,
but it's a highly speculative, volatile asset. And putting aside
bitcoin for a minute, all the thousands of other tokens,
not the stable coins that are backed by US dollars,
(02:38):
but all the thousands of their tokens. You have to
ask yourself, what's the fundamentals, what's underlying it. You don't
get a dividend, you don't get usual returns, and so
the investing public just needs to be aware of those
risks in this highly volatile space.
Speaker 1 (02:57):
What do you make of the politicization of crypto? The
fact that the Trump administration has become involved to this
extent has reportedly turned off some investors as they watched
the Trump family enriched themselves with gains, like this, is
this a democrat versus Republican thing?
Speaker 2 (03:14):
Now?
Speaker 3 (03:16):
No, I don't think so. I mean it's about our
capital markets. The US have the greatest capital markets and
they benefit from common sense rules of the road. And
when you buy and sell a stock or a bond,
you want to get, you know, various information, and you
want to know that you're getting the same treatment as
(03:38):
you know, the big investors. That's the fairness in these
capital markets that are so important.
Speaker 1 (03:45):
For a lot about the impact of ETFs on this space,
that's something you know a lot about the initial ETFs
that were greenlit to start buying crypto. Did that just
change the plumbing in the crypto market here by tying
it directly to the stock market.
Speaker 3 (04:05):
Well, ever, since antiquity, finance goes towards centralization, So it's
not surprised that that which was started as a decentralized
ecosystem and that was the vision, has become more integrated
and more centralized. Investors can express themselves in gold and
(04:28):
silver through exchange traded funds, and as of a couple
of years ago, actually all the way back to my
first year in the job, they were exchange traded funds
on bitcoin futures, just as there is for gold and silver.
Speaker 2 (04:44):
Yeah.
Speaker 1 (04:44):
Well, mister chairman, I want to ask you about, speaking
of plumbing in the markets, what happened at the CME
last week and whether you think the CFTC should be
investigating this outage. Should the CME be facing additional scrutiny.
Speaker 3 (05:00):
Look, it's something really well understood that our major stock
exchanges and futures markets, the Chicago Mercantile Exchange trades very
consequential parts of our US Treasury market, interst rates markets
their critical infrastructure and Thanksgiving evening, they had an outage
(05:23):
at a data center. Importantly, it wasn't actually their computers.
It was the chillers, as I understand it, the cooling
system in this data center, and they had an outage
for about ten hours, and so markets planned for that.
The Chicago Mercantile Exchange considered they didn't go to their
(05:44):
backup data center. They stayed partly because it was Thanksgiving evening.
As I understand it, I'm sure that they at the
Chicago Mercantile Exchange and the various regulators will keep looking
at it and look for lessons learned. You always look
for lessons learn and how can we do things better
in the future.
Speaker 1 (06:04):
Well, we've experienced an incredible number of inquiries about this
at Bloomberg. Our readers are asking, our viewers and listeners
are asking about this. It put a real chill in
the markets. To use a terrible pun in this case,
mister chairman, you don't sound that worried about this being systemic.
Speaker 3 (06:23):
Look, I think that the New York Stock Exchange, CME,
the clearing houses are systemically important, no doubt about it,
systemically important. But what happened here at this specific moment
is the cooling system as I understand how to glitch.
(06:44):
By the way, this data center is operated by a
third party. It's not operated by CME, so they have
a contract for a certain performance levels, and they didn't
go to their backup data center, which is I think
located elsewhere in New Jersey. If this would happen at
ten am on a Monday, I think the management team
(07:08):
would make a different decision and probably would switch over
to the backup data center more quickly. The markets probably
would have a little less liquidity. Not every high frequency
trading shop or principal trading firm has the same connectivity
to the backup data center, so that's an interesting business choice.
And for your institutional listeners, if that happened, they'd probably
(07:33):
see a little less liquidity until they get back to
that primary data center.
Speaker 1 (07:39):
Always fascinating to look onto the hood with Gary Gensler,
former chair of the SEC, Professor of the Practice MIT
Sloan School of Management. Thank you, mister Chairman, for the
time
Bloomberg Audio Studios, podcasts, radio news. We've been watching bitcoin
almost as much as stocks lately because it's been so
intrinsically tied to the markets. Remember when it was supposed
to be its own universe. That was the whole point
the decentralized cryptocurrency. It is bouncing back today, up fifty
four hundred dollars in approaching ninety two thousand dollars a coin.
(00:25):
So maybe it bottomed unclear as we've had multiple folks
including Mike mcglohe at Bloomberg Intelligence predict another crypto winter.
Michael Sailor also preparing for one at Strategy. Despite the love,
this administration has shown the embrace of the crypto industry
as we remember the ways with Donald Trump since he
(00:47):
took office.
Speaker 2 (00:48):
Listen last year, I promised to make America the bitcoin
superpower of the world and the crypto capital of the planet.
With the right legal framework, institutions large and swow liberated
to invest, innovate, and take part in one of the
most exciting technological revolutions in modern history. For years, you
(01:09):
were mocked and dismissed and counted out. You accounted out
as little as a year and a half ago, But
this signing is a massive validation.
Speaker 1 (01:20):
A massive validation as we watch the gyrations in the
crypto market. Pleasure to spend some time with Gary Gensler
as we consider the crypto space regulations and the plumbing
in the market. He's with us live now, former Chair
of Course of the Securities and Exchange Commission, Professor of
the practice at MIT Sloan School of Management. Mister Gensler,
(01:41):
Welcome back to Bloomberg TV and radio. Is that you
buying the dip in bitcoin?
Speaker 3 (01:48):
Joe? It's good to be back and good to be
with all of your viewers. But now I'm not participating
in that market.
Speaker 1 (01:59):
Well, what do you think of this? We've spent a
lot of time talking about this when you were in
the job at the SEC and the many warnings that
you made about this potentially risky asset, and we're witnessing
a reckoning in the marketplace right now. What do you
think is behind it?
Speaker 3 (02:16):
Look, I think it's a risk asset. In the American
public and the worldwide public has been fascinated with cryptocurrencies,
but it's a highly speculative, volatile asset. And putting aside
bitcoin for a minute, all the thousands of other tokens,
not the stable coins that are backed by US dollars,
(02:38):
but all the thousands of their tokens. You have to
ask yourself, what's the fundamentals, what's underlying it. You don't
get a dividend, you don't get usual returns, and so
the investing public just needs to be aware of those
risks in this highly volatile space.
Speaker 1 (02:57):
What do you make of the politicization of crypto? The
fact that the Trump administration has become involved to this
extent has reportedly turned off some investors as they watched
the Trump family enriched themselves with gains, like this, is
this a democrat versus Republican thing?
Speaker 2 (03:14):
Now?
Speaker 3 (03:16):
No, I don't think so. I mean it's about our
capital markets. The US have the greatest capital markets and
they benefit from common sense rules of the road. And
when you buy and sell a stock or a bond,
you want to get, you know, various information, and you
want to know that you're getting the same treatment as
(03:38):
you know, the big investors. That's the fairness in these
capital markets that are so important.
Speaker 1 (03:45):
For a lot about the impact of ETFs on this space,
that's something you know a lot about the initial ETFs
that were greenlit to start buying crypto. Did that just
change the plumbing in the crypto market here by tying
it directly to the stock market.
Speaker 3 (04:05):
Well, ever, since antiquity, finance goes towards centralization, So it's
not surprised that that which was started as a decentralized
ecosystem and that was the vision, has become more integrated
and more centralized. Investors can express themselves in gold and
(04:28):
silver through exchange traded funds, and as of a couple
of years ago, actually all the way back to my
first year in the job, they were exchange traded funds
on bitcoin futures, just as there is for gold and silver.
Speaker 2 (04:44):
Yeah.
Speaker 1 (04:44):
Well, mister chairman, I want to ask you about, speaking
of plumbing in the markets, what happened at the CME
last week and whether you think the CFTC should be
investigating this outage. Should the CME be facing additional scrutiny.
Speaker 3 (05:00):
Look, it's something really well understood that our major stock
exchanges and futures markets, the Chicago Mercantile Exchange trades very
consequential parts of our US Treasury market, interst rates markets
their critical infrastructure and Thanksgiving evening, they had an outage
(05:23):
at a data center. Importantly, it wasn't actually their computers.
It was the chillers, as I understand it, the cooling
system in this data center, and they had an outage
for about ten hours, and so markets planned for that.
The Chicago Mercantile Exchange considered they didn't go to their
(05:44):
backup data center. They stayed partly because it was Thanksgiving evening.
As I understand it, I'm sure that they at the
Chicago Mercantile Exchange and the various regulators will keep looking
at it and look for lessons learned. You always look
for lessons learn and how can we do things better
in the future.
Speaker 1 (06:04):
Well, we've experienced an incredible number of inquiries about this
at Bloomberg. Our readers are asking, our viewers and listeners
are asking about this. It put a real chill in
the markets. To use a terrible pun in this case,
mister chairman, you don't sound that worried about this being systemic.
Speaker 3 (06:23):
Look, I think that the New York Stock Exchange, CME,
the clearing houses are systemically important, no doubt about it,
systemically important. But what happened here at this specific moment
is the cooling system as I understand how to glitch.
(06:44):
By the way, this data center is operated by a
third party. It's not operated by CME, so they have
a contract for a certain performance levels, and they didn't
go to their backup data center, which is I think
located elsewhere in New Jersey. If this would happen at
ten am on a Monday, I think the management team
(07:08):
would make a different decision and probably would switch over
to the backup data center more quickly. The markets probably
would have a little less liquidity. Not every high frequency
trading shop or principal trading firm has the same connectivity
to the backup data center, so that's an interesting business choice.
And for your institutional listeners, if that happened, they'd probably
(07:33):
see a little less liquidity until they get back to
that primary data center.
Speaker 1 (07:39):
Always fascinating to look onto the hood with Gary Gensler,
former chair of the SEC, Professor of the Practice MIT
Sloan School of Management. Thank you, mister Chairman, for the
time
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