SEC Chairman Gary Gensler reaffirmed previous criticism of the crypto industry, stating in a Bloomberg interview on June 25 that the sector is highly centralized with “significant non-compliance.”
He downplayed decentralization in the sector, stating that a few platforms are “centralizing and the mixing of things that we would never allow anywhere else.”
Gensler listed specific violations such as trading against customers, front-trading and investing in a contract before it went to market.
He noted that many “leaders” of the crypto sector are in jail or pending jail time, adding:
“I say this and you giggle… but this is serious… not tacky… It’s about real investor protection.”
Gensler said noncompliance extends beyond securities laws to the Bank Secrecy Act, the Commodity Exchange Act and anti-money laundering laws.
Tokens are largely securities
Gensler said many crypto platforms operate with a significant number of tokens that, without getting ahead of themselves, are securities under the “law of the land” and the Supreme Court’s position.
The comments echo Gensler’s previous statements that most cryptos are securities.
He emphasized that tokens are offered as investment contracts and said the American public does not receive disclosures required by law. He noted that intermediaries, such as crypto exchanges and broker-dealers, handle hundreds of assets, adding:
“How many of those offers don’t have some group of entrepreneurs in the middle? It is a kind of logic that contradicts logic.”
Gensler said the issue, coupled with noncompliance, has led to the SEC filing lawsuits against numerous companies because violations harm the general public.
Gensler avoids political questions
Gensler declined to answer political questions, including about Mark Cuban’s previous assumption that Gensler’s crypto policies could cost Joe Biden the election.
Gensler simply said:
“I don’t talk about elections.”
Gensler also declined to comment on whether he is surprised by the broader political movement around crypto, saying:
“Other people can talk about elections.”
Gensler did not say whether Ethereum ETFs will receive final approval in the coming weeks or before the election, but said the process is going “smoothly.”