Gary Gensler, in an interview with Bloomberg Television, drew attention. On January 20, Gensler, who is set to step down as chairman, defended the SEC’s cryptocurrency enforcement record. The agency has taken 100 crypto-related enforcement actions during his tenure, following 80 cases initiated by former chairman Jay Clayton during the initial coin supply boom in 2017-2018. Gensler described the crypto sector as “full of bad actors” and predominantly driven by emotion rather than fundamentals. He maintained his view that most crypto assets qualify as securities and emphasized that market intermediaries must comply with securities laws. President-elect Donald Trump nominated former SEC commissioner Paul Atkins to replace Gensler. Here are the details
SEC Chairman defends cryptocurrency sanctions
Gary Gensler, the outgoing chairman of the US Securities and Exchange Commission, shared his thoughts on the regulation of the rapidly growing crypto market. While recognizing that crypto is still a small part of the overall financial markets, he said it is rife with bad actors and scams. Under his leadership, the SEC has brought nearly 80 enforcement actions in the last four years, compared to 100 under his predecessor Jay Clayton. Gensler believes the crypto market is still struggling with scams, with many projects behaving like risky investments that may not survive. In an interview with Bloomberg, Gensler said
This space is overflowing with bad actors. The public knows a lot about Bitcoin, which is two-thirds to 80% of the crypto market capitalization, depending on market capitalization.
Gensler pointed out that there are “10,000 to 15,000 projects raising money from the public”. He believes that most of these projects are speculative investments “in the hope of a better future”. Gensler made the following statements:
I’ve been in the financial world for over forty years and everything in the markets is traded on a mix of fundamentals and sentiment. I have never seen a space that is so wrapped up in sentiment and not so much about fundamentals. Most of these 10,000 to 15,000 projects will not survive. They are like venture capital investments. They will not survive.
The market still doesn’t follow the rules
Gensler pointed to the existence of “small pump-and-dump scams” that cause problems in the sector. “We’ve had a couple of years where they gained notoriety, but now they’re in jail,” he said, recalling what happened in the past. Despite the growing number of enforcement actions, Gensler believes that the crypto market is still not following the rules. He sees his role as ensuring that the market operates without fraud, manipulation and misinformation. Gensler will step down on January 20th and Paul Atkins will serve as the next SEC Chairman.
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