Michaela Alvez
Outgoing U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler has reiterated his skepticism of the cryptocurrency industry, emphasizing his view that it is largely fueled by market sentiment rather than fundamentals.
In a January 8 interview with Bloomberg Television, Gensler expressed doubts about the long-term viability of many cryptocurrency projects. He emphasized the importance of implementing stricter regulations for altcoins and intermediaries operating within the digital asset market.
Gensler further noted that retail investors continue to face a lack of proper disclosures and access to critical information from companies in the industry.
Source: Bloomberg TV
Throughout his time as SEC Chair, Gary Gensler has been a vocal critic of the cryptocurrency sector, frequently warning of widespread misconduct, including fraud, scams, and exploitative practices.
Additionally, the SEC Chair stressed the importance of the cryptocurrency industry adhering to existing securities laws, asserting that many digital tokens likely meet the criteria to be classified as securities. He has also pointed to pervasive challenges within the sector, including widespread noncompliance, instances of market manipulation, and a pattern of high-profile bankruptcies.
High-Profile Crackdowns Under Gary Gensler
In the interview, Gensler noted that his predecessor, Jay Clayton, launched approximately 80 cryptocurrency-related enforcement actions during Donald Trump’s initial term as president.
Under his leadership, the SEC intensified its enforcement efforts and focused on prominent cryptocurrency platforms, increasing the total number of cases to approximately 100.
One of the most high-profile cases during Gensler’s tenure as SEC Chairman was the lawsuit filed against Ripple Labs, Inc. In December 2020, the SEC took legal action against the company, accusing it of unlawfully selling unregistered securities through its cryptocurrency token, XRP.
In 2023, a partial ruling in the ongoing legal battle between the SEC and Ripple Labs determined that XRP is not considered a security in secondary market sales, while institutional sales were classified as securities. This decision has left the regulatory landscape surrounding XRP in a state of uncertainty.
The Court of Appeals for the Second Circuit has now directed the SEC to submit its opening appeal brief by January 15, 2025, warning that failure to meet the deadline could result in the dismissal of the appeal.
Another significant legal battle overseen by Gary Gensler emerged with Binance in June 2023, when the SEC filed a lawsuit against the company, its CEO Changpeng Zhao, and Binance.US.
The regulator accused them of commingling customer funds, manipulating markets, and operating unregistered securities exchanges. The case is still ongoing, with Binance facing scrutiny from global regulators in addition to the SEC.
Gensler’s aggressive enforcement agenda, focusing on cryptocurrency platforms, financial institutions, and corporate compliance, has sparked immense backlash from the crypto community. Many prominent figures have openly expressed relief at the news of his departure from the SEC.
Read More
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
