- Gary Gensler claimed that without foundations, most altcoin projects will fail.
- The outgoing chairman was proud of his legacy and called for appropriate revelations in space.
In a recent Bloomberg interview, Gary Gensler said declared,
“This field is Bitcoin, Ethereum and everything else… These 10K-15K crypto projects, many of them will not survive. It’s like venture capital investments and quite a few small pump-and-dump schemes.”
Will the altcoin sector fail?
Gensler noted that markets are influenced by fundamentals and sentiment. However, most 10K-15K altcoin projects rely solely on sentiment and may not survive. He added that the sector has several bad players, citing Do Kwon, Sam Bankman-Fried and Binance founder CZ.
While this may be true, there are also many projects with solid product-market fit (PMF), such as Solana’s Hivemapper (Google Maps equivalent) and cheaper cross-border transactions via Tron and Ton blockchains.
However, during Gensler’s leadership, there was no regulatory clarity on the status of these networks.
Instead, the regulator opted for an enforcement approach that insiders said stifled innovation and even fueled Donald Trump’s presidential victory after he embraced the industry.
At the time of writing, lawsuits are pending against Coinbase, Binance, Ripple Labs, and other crypto companies, including Uniswap, which has been notified of a possible lawsuit.
As a result, Chairman Gensler is considered an “enemy” by most of the crypto community. However, he was proud of his legacy and enforcement actions, stating that the industry was “built on non-compliance.” He declared,
“It’s a field (crypto sector) built on non-compliance, and I’m proud of what we’ve done. There is still a lot to be done, especially in the field of these alternative currencies of 10,000 to 15,000 euros and the intermediaries themselves.”
Gensler added that the sector is the most volatile segment but lacks good disclosures.
That said, the outgoing chairman will be replaced by pro-crypto Paul Atkins in about two weeks. It remains to be seen how the new regime will bring greater regulatory clarity to the sector.