Gary Gensler, the Chair of the U.S. Securities and Exchange Commission, has firmly stated that the crypto industry 'will not long persist' without essential investor protections. In a recent interview with CNBC's Squawk Box, Gensler highlighted the need for robust disclosures, referring to the substantial turmoil experienced in the market over the past few years.
During 2022, several high-profile firms, including the crypto exchange FTX, hedge fund Three Arrows Capital, and lenders Celsius and Genesis, faced significant challenges. Gensler pointed out that FTX CEO Sam Bankman-Fried was sentenced to nearly 25 years in prison for fraud, while other key figures in the industry have also faced serious legal consequences.
Gensler stated, "Look at the leading lights in this field; many are in jail right now. There have been tens of billions in losses and bankruptcies." He emphasized that trust and consumer protection are essential for the sustainability of any innovative field.
Gensler reiterated his view that most cryptocurrencies qualify as securities and urged crypto platforms to register with the SEC. He acknowledged that bitcoin is an exception, stating, "Bitcoin is not a security," and that investors can access it through exchange-traded products.
When asked about the differing views on crypto from presidential candidates, Gensler refrained from commenting on the elections. However, he noted that both Vice President Kamala Harris and Donald Trump have indicated more favorable positions toward crypto. Harris has mentioned encouraging innovative technologies while protecting consumers, while Trump has criticized regulatory actions and proposed his crypto initiative, World Liberty Financial.
Gensler concluded, "Investor protection helps build innovation," affirming that regulatory measures can coexist with technological advancements.
