The digital asset industry is full of fraud, scams, bankruptcies and money laundering. This was stated by SEC Chairman Gary Gensler, The Block reports.
He called the scandals arising in the industry [FTX collapse, Three Arrows Capital and others] “not surprising.”
“While many organisations claim to operate outside the regulatory acts issued before the famous Bitcoin white paper by Satoshi Nakamoto, they also go to court in bankruptcy proceedings,” — said Gensler.
The official reminded that firms must follow rules applicable to TradFi. In his view, the industry still faces problems due to “pervasive non-compliance with regulatory requirements.”
“There is nothing in the crypto-asset markets to indicate that investors and issuers deserve less protection under securities laws. Congress could have said in 1933 or 1934 that they apply only to stocks and bonds. However, the definition of a security in regulatory acts included a long list of items, including the investment contract” — stressed Gensler.
In September, the SEC chair, during a speech before the House of Representatives, faced tough criticism from lawmakers. Lawmakers questioned the agency’s policy on digital assets and clarified the timeline for approving a Bitcoin-ETF.
One month earlier, Rep. Warren Davidson urged to remove Gensler from his post as head of the Commission due to a botched handlingagainst Grayscale. It was followed by the regulator’s partial defeat in the Ripple case Ripple.
Subsequent media accused the SEC chair of turning the agency into a “banana republic.”
Earlier, Gensler stated that all digital assets, aside from Bitcoin, can be classified as securities.