Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC), has once again expressed his thoughts on the state of the cryptocurrency market. In an interview with Bloomberg TV on their “Bloomberg Markets” show, Gensler issued a warning to investors, stating that the cryptocurrency industry is “rife with fraud, rife with hucksters.”
Gensler emphasized that the crypto market is highly speculative, and investors should be wary of assuming they are protected under securities laws. Despite some tokens falling under these laws, the SEC head stressed that many investors are not receiving the level of protection they might expect.
This public warning comes in light of a recent court ruling that went against the SEC’s stance on XRP’s security status.
Gary Gensler Says There Are Also Good-Faith Actors In Crypto
While acknowledging that there are legitimate actors in the crypto space, Gensler reiterated his belief that the industry is teeming with fraudulent practices.
“This is a field rife with fraud, rife with hucksters,” He said. “And there are good faith actors as well, but there are far too many that aren’t.”
Gary Gensler also directed his attention toward cryptocurrency exchange platforms, raising concerns about their operations. He hinted that certain exchanges may be engaging in activities that would not be tolerated on traditional stock exchanges. Mr. Gesnler stated that investors in the crypto space may not receive “full, fair, and truthful disclosure” and that some exchanges might be commingling and trading against their customers.
Under Gensler’s leadership, the SEC has been involved in legal disputes with major crypto firms like Ripple (XRP), Binance, and Coinbase. Despite the regulator’s failure to issue comprehensive crypto rules, these lawsuits revolve around allegations of misleading investors, violating securities laws, and evading compliance measures.
Moreover, Gary Gensler previously claimed that most existing crypto tokens, including the likes of Ethereum (ETH) and LBRY Credits (LBC), meet the investment contract test and should be considered securities. However, this is an exception to Bitcoin (BTC), the world’s largest crypto by market cap.
His stance implies that many tokens might not fully comply with U.S. securities laws, leading to several legal challenges for token issuers, promoters, and trading platforms. These unclear regulatory standards have prompted certain American lawmakers to push for regulatory clarity for the crypto market.