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- SEC Chair Gary Gensler reiterates his concerns about the crypto sector during a conference on Wednesday.
- Gensler highlights potential risks to investor confidence and the broader financial system.
- The crypto industry, although “kind of small,” has direct links to some failed banks, as per Gensler.
Gensler provides a cautionary note on crypto, stressing its potential ripple effects on the broader economy and the need for adherence to existing laws.
Gensler’s Hardline Stance Continues
During a conference organized by Better Markets to mark the 15th anniversary of Lehman Brothers’ collapse in the 2008 financial crisis, SEC Chair Gary Gensler once again took a firm stance against the cryptocurrency industry. Emphasizing the non-compliance of many crypto entities with securities laws, he painted a cautionary picture of an industry that can negatively influence the broader financial ecosystem.
Potential Impact on the Financial System
Gensler raised concerns about the millions of investors affected by the crypto world. Despite acknowledging the relative smallness of the crypto industry compared to the vast capital market, he underscored its potential to disrupt investor confidence. This disruption, Gensler suggested, could be profound, as finance fundamentally relies on trust. He also made a connection between certain regional banks that failed earlier this year and the crypto industry, although specifics were not provided.
“Rife with Misconduct”
The SEC Chair expressed his alarm at the widespread misconduct within the crypto space. His long-standing experience in finance made this observation particularly significant. Drawing attention to those trying to “run outside of the law,” he warned against the allure of celebrity endorsements in the sector and attempts to maneuver around rules in various jurisdictions.
No Need for New Rules, Existing Laws Suffice
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Amid calls for clarity in the crypto space, Gensler was assertive in highlighting that the current legislative framework was adequate. “We have rules. We have rules,” he reiterated, emphasizing the importance of adhering to laws passed by Congress. These encompass anti-money laundering, sanctions, securities laws, and the commodities exchange act. Interestingly, Gensler refrained from responding to comments regarding “sympathetic judges” in recent court cases concerning the crypto domain.
SEC Chair Gary Gensler’s remarks provide a clear view of his stance on the crypto industry, echoing previous concerns while emphasizing the potential risks to the broader financial structure. While the industry’s scale may be relatively small, its implications are not to be underestimated. Gensler’s insistence on the adequacy of current laws serves as a reminder for the sector to comply with existing regulations. As the crypto landscape continues to evolve, the balance between innovation and regulation remains a pivotal discussion point.