SEC Chief Gary Gensler Expresses His Concerns About Crypto
Series of Lawsuits Against Crypto Companies
The pessimistic stance of the SEC regarding cryptocurrencies is not a secret by any means. The federal agency has continued to file a series of lawsuits against the most prominent crypto entities. At the same time, the SEC under the reign of Gary Gensler has also marked various crypto tokens as alleged unregistered securities.
However, recently SEC Chief has aired some new comments about the virtual currency markets. He maintained that cryptocurrencies are riddled with fraud, misconduct, and abuse. He was testifying in front of Capitol Hill recently to testify in from of the Senate Banking Committee.
He maintained that in case the crypto sector implements investor protection requirements it will become unfavorable for investors. He also claimed that the sector has experienced a series of big breaches that has led to the idea that the sector is filled with scams, abuse, and bad actors.
The stance from the SEC Chief is no surprise considering his track record and regulatory approach towards the nascent industry. He dubbed cryptocurrencies as fraudulent and speculative assets in a prior interview with Bloomberg. He was summoned by the Senate Committee as a witness regarding regulatory oversight towards the crypto sector.
SEC Chief Talks About Technological Development in the Financial Sector
SEC Chief testified in front of the Senate that the infrastructure of the world is changing rapidly with the introduction of AI and emerging e-commerce. He retained that there is an increasing amount of financial inclusion that may empower developing economies.
He further stated that a few nations might have aims to supplant the economic prowess of the country as much as they could. Lately, SEC has faced considerable criticism regarding its stance towards cryptocurrency sector on account of lawsuits.
At the same time, the federal regulators have been delaying the approval of spot ETFs for digital assets. The longest running case of SEC and a crypto enterprise named Ripple Labs has reached its finality with partial losses for both sides.
However, Gensler listed Ripple Labs outcome as a loss and reiterated his intention to appeal the ruling once again during his testimony. In addition, he also emphasized the definition of virtual tokens to be same as securities while asserting that investors should have same protection under securities laws for blockchain sector.
At the same time, he retained that the existing securities laws should be applied to digital currencies.
Gensler has continued to retain his strict stance towards the crypto sector regardless of receiving heavy criticism. Under his leadership, SEC is now pursuing legal action against Coinbase and Binance. Binance.US defended its position in the court by moving to block the deposition requests aired by SEC officials.
The firm has retained that SEC has been coercive in its approach and has not provided substantial proof to back the allegations about misappropriation of consumer funds.
SEC also named CZ and Guangying Helina Chen for commingling customer funds valued in billions using intermediaries. Meanwhile, Binance has continued to deny the charges with CZ maintaining that the firm does not exercise any control over the private keys of the consumer resources.
The presiding judge over the case has rejected the bid by SEC to freeze Binance.US assets. Binance.US contemporary Coinbase is also defending the firm against charges brought by SEC officials.
