SEC Chair Warns of Harm to the Economy from Cryptocurrencies

Chairman SEC Gary Gensler reaffirmed his hardline stance on digital assets, saying they could harm the global financial system.

“I have never seen a place so rife with wrongdoing and people trying to push beyond the law,” Gensler described the crypto industry.

The official spoke at a conference marking the 15th anniversary of the Lehman Brothers bankruptcy, organized by the nonprofit legal organization Better Markets.

The head of the SEC noted that millions have been harmed by digital assets, and such a situation undermines the trust of many investors even in traditional markets.

Gensler also criticised industry support from celebrities and efforts to create a regulatory framework in some U.S. states. He added that separate rules for cryptocurrencies in the country are not needed, as they already exist.

“They are laws enacted by Congress, whether in anti-money laundering and sanctions or in securities and commodities regulation,” the chair clarified.

However, Gensler dodged a question about “sympathetic judges,” probably in the context of the agency’s proceedings with Ripple and Grayscale.

Earlier, the head of the Commission confirmed that most cryptocurrencies are securities and fall under the agency’s jurisdiction. In his view, the overwhelming majority of digital assets meet the definition of investment contracts and should be regulated accordingly.

In July, Gensler requested additional funding of $109 million to bolster investor protections in the crypto markets.

In August, U.S. Representative Warren Davidson again called for Gary Gensler to be removed from the post of head of the SEC due to the mishandling of the Grayscale case.