Gensler: SEC has no Intention of Giving a "Helping Hand" to Fraudsters
U.S. Securities and Exchange Commission (SEC) head Gary Gensler criticized the crypto industry for regulatory non-compliance.
There is a lot of noncompliance in the crypto space. It undermines confidence when so many people have been hurt and all they can do is stand in line in the bankruptcy court. Further, this can make it hard for the good faith actors to compete. pic.twitter.com/9L1WKa4R6S
— Gary Gensler (@GaryGensler) December 21, 2023
"There's a lot of non-compliance [with regulations] in the crypto industry. It undermines trust, while a lot of people who are affected can only stand in line in bankruptcy court. It can also make it more difficult for bona fide entities to compete," he said.
In a comment to CoinDesk, the SEC chief said there are "too many frauds and bankruptcies in the industry." Despite his "deep respect for investors," Gensler questioned the proper disclosure by the projects whose tokens they buy.
"Investors should be vigilant and cautious, they should be prepared to lose 100% of their assets. If you can find a website, read about them on CoinDesk, you are probably betting on these entrepreneurs," he explained.
According to the official, opinion leaders in the crypto industry have a large audience on social media, with interaction continuing around the clock.
Gensler also questioned the real value proposition of most tokens. Many projects are just "speculative investment contracts," he noted.
"If something good exists, we can understand it. What is the value proposition of owning a decentralized token?" the SEC chief said.
Crypto-enthusiasts added to his posting in X about regulatory non-compliance by revealing that US publicly traded Coinbase has repeatedly sought clarification on industry compliance over the past few years.
"The SEC has not taken a clear position and has relied on regulation through enforcement," reads a note in X, citing relevant material from Reuters and Forbes.
Billy Marcus, co-founder of meme cryptocurrency Dogecoin, said Gensler "never laid out the actual rules" and called him "useless on all fronts."
bro you’ve never laid out any actual rules, you just hand wave
— Shibetoshi Nakamoto (@BillyM2k) December 21, 2023
you’re basically useless in every single way
"Stunning hypocrisy from a man who fawned over the biggest fraud in recent memory. Gensler is a political liability whose actions have exterminated consumers and destroyed the SEC's integrity, leaving it a pal of Wall Street," wrote Ripple CEO Brad Garlinghouse.
Stunning hypocrisy from the person who cozied up to the biggest fraud in recent memory.
— Brad Garlinghouse (@bgarlinghouse) December 21, 2023
Gensler is a political liability whose actions have decimated consumers and destroyed the integrity of the SEC, while remaining buddy-buddy with Wall Street. https://t.co/hAgjJ9IsGR https://t.co/D3pz4Dq3yy
In 2023, U.S. politicians and members of the crypto industry have repeatedly criticized the head of the SEC and the agency as a whole. In January, Grayscale Investments CEO Michael Sonnenschein accused the Commission of lagging in regulating the industry.
In April, SkyBridge Capital CEO criticized Gensler for "messing up" the SEC. That same month, the official was slammed by Republicans during a congressional hearing for his vague stance on cryptocurrencies.
In June, congressmen introduced a bill to fire Gensler. In August, after the victory of Grayscale in court against the SEC, the proposal to change the head of the agency sounded again.
Recall that in December, U.S. presidential candidate Vivek Ramaswamy criticized Gensler's work and promised to significantly reduce the number of employees in the Commission if elected.
In response to the criticism, Gensler said that he did not intend to "lend a helping hand" to fraudsters and that his goal was to protect investors.