U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler defended the agency’s attention to the crypto industry in an interview on May 7, emphasizing that it was not an inappropriate focus, but rather a reaction to it Frequency of fraud in this sector.
Speaking to CNBC, Gensler emphasized that while cryptocurrencies only make up a small portion of financial markets, they disproportionately contribute to problems such as fraud and fraud and therefore attract significant media attention.
Gary Gensler’s great concern
Gensler noted that the financial press has increased coverage of crypto topics compared to traditional securities markets, leading to an increased perception of the industry’s importance.
“We oversee a $110 trillion capital market. Cryptocurrencies are only a small portion of our overall markets, but an outsized portion of the scams and problems in our markets,” Gensler said, noting that the volume of journalist questions about cryptocurrencies relative to their market capitalization reflects this increased media attention.
“Manipulation is not allowed in our markets,” Securities and Exchange Commission Chair Gary Gensler said on meme stocks.https://t.co/nIw0K9a1Am pic.twitter.com/3B3tITk5pA
— CNBC (@CNBC) May 7, 2024
The SEC’s enforcement actions in the crypto space have increased: 46 cryptocurrency-related enforcement actions were initiated last year, an increase from previous years.
This is an increase compared to previous years. “The ratio between journalists’ questions and market capitalization is excessive and is also related to what the financial media focuses on,” he said.
But these actions represent just a fraction of the SEC’s total enforcement actions , which totaled 501 last year, according to analysis by Cornerstone Research and law firm Gibson Dunn .
Gary Gensler has always been interested in transparency
SEC Chairman Gary Gensler emphasized the need for transparency in crypto markets and advocated for mandatory disclosure to combat circumvention of registration requirements by some industry participants. He cited Supreme Court Justice Louis Brandeis’ famous quote, “Sunlight is the best disinfectant,” to emphasize the importance of transparency.
Gensler’s comments come at a time when the SEC is increasingly attempting to regulate the crypto industry, evidenced by several lawsuits against prominent crypto companies and figures such as Sam Bankman-Fried, Binance, its CEO Changpeng Zhao and Coinbase. These actions reflect Gensler’s stance that most cryptocurrencies should be classified as securities, which is consistent with the SEC’s regulatory approach.
While the SEC’s review has raised calls for more explicit regulatory guidance to promote innovation in the U.S., the agency is continuing its campaign to potentially classify Ethereum as a security and has issued subpoenas as part of that effort. Gensler emphasized the importance of registration requirements to ensure mandatory disclosure, calling them essential to maintaining market integrity.
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