- SEC Chairman Gary Gensler is concerned about “fraud” in the crypto industry.
- The head of the regulator criticized the structure of the cryptocurrency market and the lack of legal protections for investors.
- SEC will continue to monitor cryptocurrency exchanges that have violated regulations.
SEC Chairman Gary Gensler expressed concern about “rampant manipulation” in the cryptocurrency market. In an interview with Bloomberg TV, Gary Gensler warned investors that the crypto sector is “overrun with fraudsters.”
“You should know that cryptocurrencies are a very speculative asset class. Don’t rely on the securities laws, they can’t protect you,” the SEC chairman explained.
Gensler’s biggest concern is the lack of regulation and investor protection in the crypto market. He believes this could lead to serious financial losses in the future. Unlike NASDAQ or the New York Stock Exchange, cryptocurrency exchanges are “playing unfair games” against their customers, the regulator’s chief assured.
At the same time, Gensler declined to comment directly on the wave of applications for spot bitcoin-ETFs. He clarified that he would not make a direct statement until the appeals were reviewed by the five-member panel.
In June, the SEC filed a lawsuit against Coinbase, accusing the cryptocurrency exchange of violating securities laws. The day before, the regulator sued Binance. Coinbase later said the SEC has no jurisdiction over the exchange’s tokens. The judge ordered arbitration to resolve the dispute by a third neutral party.
Gary Gensler previously said he was unhappy with the outcome of the lawsuit in the case against Ripple Labs. The SEC has filed a case against Ripple in 2020. The Commission argued that XRP is a security and demanded to stop trading the token on exchanges.
In July 2023, a court in the Southern District of New York ruled that the sale of the XRP token through exchanges is not an offering of securities. Nevertheless, the judge still considered sales to institutional investors worth about $700 million as such. Thus, the court partially satisfied the requirements of the U.S. Securities and Exchange Commission.
The statements of the head of the SEC recently do not find support both in the crypto market and the U.S. authorities. In June, U.S. Congressman Warren Davidson demanded that Gensler be fired and the SEC be reformatted.
And in June, the U.S. Congressman demanded that Gensler be fired and the SEC be reformatted.