SEC Chairman Gary Gensler reiterated his long-standing criticism of the digital currency industry, calling it “full of bad actors” in a Bloomberg TV interview on Wednesday.
Reflecting on his tenure, Gensler said he was proud of the SEC's enforcement actions in the crypto space, noting their consistency over the years.
Gensler highlighted the foundation laid by his predecessor, Jay Clayton, leading 80 crypto-related activities from 2017 to 2020. During Gensler's four-year presidency, the SEC launched around 100 actions, maintaining a sustainable approach to tackling fraud and misconduct in the rapidly changing sector.
Crypto is less than 1% of the US financial markets, but it is full of “scams,” Gensler said.
“I've never seen a field that is so connected in emotion and not so much about fundamentals,” Gensler said. “Of those 10,000 to 15,000 projects, many will not survive. They are similar to venture capital investments. They're not going to survive.”
Gensler's comments come as he prepares to step down on January 20, the day President-elect Donald Trump was inaugurated.
Gensler and Crypto
Gensler, who was nominated by Biden, has expressed skepticism about crypto regulation. He came out strongly against the FIT21 bill after it was approved in the House.
The relationship between the crypto industry and Gensler has been controversial. The industry mostly views Gensler with suspicion and frustration. Many believe that it is strict enforcement procedure and classifying most crypto assets as securities has stifled innovation and created legal uncertainty.
Gensler reiterated that most cryptocurrencies qualify as securities, urging companies to register with the SEC.
Critics within the industry argue that compliance is impossible due to regulatory frameworks designed for traditional financial institutions.
Reflecting on his tenure, Gensler acknowledged the challenges but emphasized the SEC's role in building on previous efforts.
“I am proud of what we have achieved, but there is still work to be done,” he said.
