SEC Chair Gensler Highlights ‘Outsized’ Crypto Scams: Impact on Bitcoin (BTC) and Ethereum (ETH) Markets

• In a recent interview with CNBC, Securities and Exchange Commission (SEC) Chair Gary Gensler expressed concerns about the crypto industry, particularly its alleged association with scams, fraud, and compliance issues.
• Gensler emphasized the importance of compliance with securities laws in the crypto space, noting that many digital assets fall under the classification of securities.
• He also highlighted concerns about the lack of required disclosures and investor protections in the crypto industry, as well as potential conflicts of interest within the centralized crypto market.

SEC Chair Gary Gensler reiterates concerns about the crypto industry, emphasizing the need for compliance with securities laws and greater transparency. He also discusses the SEC’s ongoing review of Ethereum’s classification.

Compliance With Securities Laws In Crypto

Gensler acknowledged that while cryptocurrencies constitute a relatively small segment of the overall financial markets, they allegedly exert an “outsized” influence regarding scams, fraud, and problems due to non-compliance with existing securities laws. The SEC Chair stressed that many digital assets fall under the classification of securities according to interpretations by the US Supreme Court, making compliance with securities regulations a crucial aspect of the industry.

Lack of Required Disclosures and Investor Protections

Gensler expressed concern over the “lack of required disclosures” and investor protections in the crypto space, drawing attention to the alleged “discrepancy” between the level of transparency provided by traditional public companies during earnings seasons and the limited disclosure practices of crypto assets. He also raised concerns about “conflicts of interest” observed among intermediaries operating within the “centralized crypto market.”

SEC’s Position On Ethereum Under Review

Addressing allegations of misleading Congress regarding the SEC’s stance on Ethereum’s classification, Gensler clarified that the commission accurately shares information during congressional hearings and refrains from discussing ongoing investigations or expressing opinions on compliance with the law. Gensler confirmed that the commission currently reviews the classification of cryptocurrencies like Ethereum as genuine securities tradable on exchanges. It’s worth noting that the SEC chairman previously suggested that only Bitcoin holds the commodity classification, leaving other cryptocurrencies, including Ethereum, outside of this designation.

Conclusion

Gensler underscored the SEC’s role in ensuring that investors receive accurate and complete information, regardless of the purpose behind their investments. He concluded that while individuals have the freedom to form their own views based on accurate disclosures, market manipulation and misleading the public are strictly prohibited. As of the latest update, Ethereum is trading at $3,066, reflecting a 2.8% increase over the past week. However, the token has experienced a marginal decline of 0.5% in the last 24 hours, with its price potentially depending on the ability of the $3,000 support level to prevent further downward movement.