U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler has once again raised concerns about the risks posed by the cryptocurrency industry.
In a recent interview with Bloomberg recently, Gensler noted that many investors have been hurt because they did not have enough information about their investment in digital assets.
gensler on bloomberg @business moments ago: “happy sweet 16” to #bitcoin pic.twitter.com/MNLCCnqQcS
— Alex Thorn (@intangiblecoins) October 22, 2024
Gensler highlighted the fact that many investors have suffered heavy losses and ended up in bankruptcy cases, which indicates the risks of investing. The SEC Chair emphasized that the lack of disclosure in the crypto industry is a major problem and it harms investor perception of capital markets.
While acknowledging that blockchain technology and current securities laws can coexist, Gensler reiterated that the SEC’s key focus is protecting investors. “All too many people have been hurt, all too many people have lost money and lined up in bankruptcy courts to deal with their claims,” he said.
Gensler defends SEC actions and describes legal framework
Gensler also explained how the agency would need to adapt in light of how courts read securities law, explaining that the SEC works within the law. If the courts give new meanings to these laws, the agency will adapt. This flexibility, he said, was something that the SEC has embraced when it comes to the regulation of markets such as cryptocurrency.
According to Gensler, people should be allowed to make their investment decisions on their own, but they should be shielded from inaccurate or incomplete information. “It is a field that has a lot of conflicts in the middle of it,” Gensler remarked.
The reporters also inquired as to how Gensler might respond if Trump were to win the 2024 presidential election. This is because Trump has promised to fire the SEC Chair “on day one” if he is elected. Gensler refused to comment on the possibility of being dismissed.
Upcoming Bitcoin’s 16th birthday
Gensler also mentioned during the interview the 16th anniversary of Bitcoin, which came out as a result of the release of the white paper by the anonymous developer, Satoshi Nakamoto, in 2008. The first record of a Bitcoin transaction was on 3rd January 2009, when it introduced the ‘genesis block’. While noting that Bitcoin is not a security, Gensler pointed out that the classification of the majority of the crypto assets is unclear under the present legal frameworks.
This is because the SEC recognizes Bitcoin as a commodity, not a security, making it different from other tokens. However, the rest of the crypto market is still unclear on the legal side since the SEC remains active and aggressive in trying to classify the tokens under its jurisdiction.
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