SEC Chairman Gary Gensler criticized the cryptocurrency sector for not providing adequate disclosure to investors compared to the traditional financial sphere. In an interview with CNBC, Gensler said that most cryptocurrencies are considered securities and must comply with relevant laws.
Gensler's comments came just days after Robinhood's cryptocurrency arm received notice from Wells about potential enforcement action by the Securities and Exchange Commission. The regulator issued similar notices to Coinbase and decentralized finance (DeFi) cryptocurrency exchange Uniswap. The cryptocurrency market has attracted increasing regulatory scrutiny in recent years. During the interview, Gensler addressed this issue, providing insight into the intersection between cryptocurrencies and traditional stock markets.
Extensive censorship
Regarding recent developments, Gensler emphasizes that the SEC has a mandate to uphold legal standards in the financial industry. He stressed that ongoing litigation and enforcement efforts seek to protect investors' interests.
“But coming back to the crypto-assets space, without pre-judging any of them, many of these tokens are securities under the law of the land, as interpreted by the US Supreme Court. So we follow that law. And you, investors don't… They obtain required or requested disclosures regarding those assets.”
Gensler outlined the SEC's expanded jurisdiction, overseeing a staggering $110 trillion in capital markets. While the stock market makes up a large segment, Gensler emphasized that cryptocurrencies, despite being a smaller segment, suffer disproportionately from fraud and non-compliance with securities laws.
Amid growing concerns about cryptocurrency scams, Gensler highlighted regulatory non-compliance in the cryptocurrency space. He emphasized the crucial role of disclosures in traditional stock markets, underscoring the disparity in transparency between crypto assets and traditional securities.
Gensler reaffirms cryptocurrency regulation
In response to inquiries regarding the attention devoted to cryptocurrencies, Gensler emphasized the role of the media in shaping the discourse. Despite the spotlight on cryptocurrencies, Gensler expressed his commitment to addressing broader market issues, including ensuring investor protection and market integrity. He maintains his long-standing position that most cryptocurrencies are securities.
Recently, Robinhood CEO Vlad Tenev criticized the SEC's enforcement actions, saying: “Over the past three years, we have reached a state of regulatory onslaught that is hurting American businesses and consumers. The SEC's ongoing attack on Cryptocurrencies, along with recent rule proposals such as those related to predictive data analytics, represent another inappropriate attempt by the administrative state to stifle innovation.
This article was written by Jared Kirroy at www.financemagnates.com.