Gary Gensler will step down as chair of the U.S. Securities and Exchange Commission (SEC) Jan. 20 with the inauguration of President-elect Donald Trump.
But that didn’t stop Gensler from expressing concerns that more needs to be done to regulate the cryptocurrency market, particularly altcoins and intermediaries.
In an interview with Bloomberg Television on Wednesday (Jan. 8), he emphasized that everyday investors still lack adequate disclosures from digital asset firms and said the cryptocurrency landscape is “rife with bad actors,” highlighting the need for regulatory oversight to protect investors from fraud and misinformation.
Gensler’s tenure has been characterized by aggressive enforcement actions against numerous cryptocurrency entities, including high-profile cases involving Coinbase Global and Ripple Labs. Since taking office in 2021, he has overseen about 100 enforcement actions related to cryptocurrencies.
While Gensler’s SEC chair predecessor, Jay Clayton, focused his 80 enforcement actions between 2017 and 2020 on token issuers, Gensler’s approach often targeted market intermediaries for failing to comply with securities laws regarding registration and disclosure.
Meanwhile, Trump has nominated Paul Atkins, a former SEC commissioner known for his pro-crypto stance, to succeed Gensler. This transition is expected to lead to a more favorable regulatory environment for digital assets, potentially reducing enforcement actions against the industry. It’s a sharp contrast with Gensler’s more stringent regulatory approach.
In his remarks, Gensler expressed concern that many of the crypto projects currently in existence are unlikely to survive, comparing them to venture capital investments prone to high failure rates.
Despite criticism from the cryptocurrency community that classifying most crypto assets as securities has stifled innovation, Gensler defended his record in the interview. He asserted that the SEC’s actions were necessary to maintain market integrity and investor protection.
“I’ve never seen a field that’s so much wrapped up in sentiment and not so much about fundamentals,” he remarked, underscoring his belief that regulatory clarity is essential for the cryptocurrency industry’s future.
For more on what’s to come, read up on PYMNTS’ “Three Most Important US Crypto Policies to Watch This Year.”
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