Crypto is ‘rife with bad actors’

SEC Chairman Gary Gensler reiterated his long-standing criticism of the cryptocurrency industry in a Bloomberg TV interview on Wednesday, calling the industry “full of bad actors.”

Speaking about his tenure, Gensler said he was proud of the SEC’s enforcement actions in the crypto space, noting their consistency over the years.

Gensler highlighted the foundation laid by his predecessor, Jay Clayton, who spearheaded 80 crypto-related enforcement actions from 2017 to 2020. During Gensler’s four years of leadership, the SEC initiated nearly 100 actions, maintaining a steady approach to combating fraud and abuse. It is a rapidly developing sector.

Cryptocurrency makes up less than 1% of U.S. financial markets, but it is rife with “scams,” Gensler said.

“I have never seen a field that is so involved with emotions and so unconcerned with the fundamentals,” Gensler said. “Most of these 10,000 to 15,000 projects will not survive. They are like venture capital investments. They won’t survive.”

Gensler’s comments come as he prepares to resign on Jan. 20, when President-elect Donald Trump is inaugurated.

Genes and Crypto

Gensler, a Biden appointee, has been vocal about his skepticism towards crypto regulation. He strongly opposed the FIT21 bill after it was passed in the parliament.

The relationship between the crypto industry and Gensler has been controversial. The industry mostly views Gensler with suspicion and disappointment. Many believe its strict enforcement approach and classifying most crypto assets as securities stifles innovation and creates legal uncertainty.

Gensler has repeatedly urged firms to register with the SEC, arguing that most cryptocurrencies qualify as securities.

Critics in the industry argue that compliance is impractical due to regulatory frameworks designed for traditional financial institutions.

Speaking about his tenure, Gensler acknowledged the challenges but emphasized the SEC’s role in building on previous efforts.

“I’m proud of what we’ve accomplished, but there’s still work to be done,” he said.