SEC Chair Gary Gensler: ‘Far Too Many Frauds and Bankruptcies’

Earlier this month, I had the opportunity to speak with U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, recognized by CoinDesk as one of the most influential figures in the crypto industry over the past year, about how he views his agency’s role in the digital asset world.

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The narrative

The crypto industry has its share of bad – or maybe inept – actors. After the past year, that point can’t really be argued. I spoke to SEC Chair Gary Gensler earlier this month as part of my reporting for this year’s Most Influential series.

Why it matters

The SEC chief and the agency he oversees continue to remain the most prominent regulatory body for the U.S. crypto industry, and with good reason – while crypto companies look for state money transmitter licenses and look to comply with anti-money laundering rules, much of the industry’s trading falls within the SEC’s bucket (or not, depending on who you ask).

Breaking it down

Crypto’s entrepreneurs have “generally built a business model around noncompliance with the law,” the SEC chief said.

Gensler, one of the industry’s favorite – or perhaps least favorite – foils was recognized by CoinDesk as one of crypto’s most influential figures through 2023. In the past year his agency has sued crypto exchanges like Coinbase, Binance and Kraken, begun reviewing a new slate of spotbitcoin exchangetraded fund (ETF) applications and started outlining a (still-untested) pathway for companies to list and trade digital assets in compliance with the agency’s vision of how digital assets fit within existing law.

But in Gensler’s words, much of his focus is on addressing a field that’s rife with fraud and where some companies fail to protect their customers against wash trading or other issues. It’s a view he’s reiterated a number of times, pointing to the bankruptcies of the past 18 months or so as an example.

While he has “deep respect for the investing public,” Gensler told CoinDesk he does not believe crypto investors are receiving appropriate disclosures from the various projects they may be buying tokens for.

There are “far too many frauds and bankruptcies” out there, he said.

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