Gary Gensler Says Crypto Industry Is Full of Peddlers, Fraudsters and Ponzi Schemes: Report

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The chairman of the United States Securities and Exchange Commission (SEC) is doubling down on his tough stance on crypto as he reportedly said the industry is teeming with criminals and illicit activity.

Speaking at the Piper Sandler Global Exchange and FinTech Conference in New York, Gary Gensler said crypto reminded him of the 1920s, which he said was an era absent from federal securities laws, according to CNBC.

The hawkers. Fraudsters. Scammers. Ponzi schemes. The public lined up in bankruptcy court.

The longtime crypto critic reiterates the SEC’s position that most digital tokens are securities and fall under the agency’s jurisdiction.

Since most crypto tokens are subject to securities laws, it follows that most crypto intermediaries must also comply with securities laws.

Gensler also says that providers of crypto assets should register with the SEC. He points out that the role of the SEC is to prevent investors from being caught in the middle of the implosion of crypto projects.

These alleged failures deprive investors of essential protections, including rules that prevent fraud and manipulation, proper disclosures, segregation of client assets, safeguards against conflicts of interest, oversight by a self-regulatory body, and a routine inspection by the SEC.

The statement follows SEC lawsuits against major crypto exchanges Binance and Coinbase.

The regulator has filed multiple charges against Binance and its CEO Changpeng Zhao for allegedly violating federal securities and investor protection laws. The SEC also accuses Coinbase of operating as an unregistered stock exchange, brokerage, and clearing agency.

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