In a recent interview with CNBC, the chairman of the Securities and Exchange Commission (SEC) Gary Gensler has reiterated its concerns about the crypto industry, highlighting its alleged association with scams, fraud, and compliance issues in the broader market.
Securities Law Compliance in Crypto
Gensler began with grateful that even though cryptocurrencies constitute a relatively small segment of the overall financial markets, they allegedly exert an “inordinate” influence on scams, fraud and problems due to non-compliance with applicable securities laws .
The SEC Chairman pointed out that many digital assets fall under the classification of securities under the interpretations of the United States Supreme Court, making it compliance with securities regulation being a crucial aspect of the industry.
The SEC Chairman emphasized the commission’s responsibility to protect investors and ensure that those seeking investments in “securities” follow the law.
Gnesler expressed concern over the “lack of required disclosures” and investor protections in the crypto space, drawing attention to the alleged “gap” between the level of transparency provided by traditional public companies during earnings season and limited disclosure practices for crypto assets.
In his speech, Gensler also raised concerns about “conflicts of interest” seen among intermediaries operating within the “centralized crypto market.”
Gensler highlighted actions that would be considered “unacceptable” within the traditional system. financial exchangessuch as the New York Stock Exchange (NYSE), and emphasized the importance of preventing trading activities that go against the interests of investors, but did not provide examples of these alleged practices.
SEC Position on Ethereum Under Review
Responding to Allegations of Congressional Deception Regarding the SEC’s Position on Ethereum classificationGensler clarified that the commission accurately shares information during congressional hearings and refrains from discussing ongoing investigations or expressing opinions on compliance with the law.
Gensler confirmed that the commission is currently reviewing the classification of cryptocurrencies like Ethereum as bona fide tradable securities on an exchange.
It should be noted that the SEC Chairman had previously suggested that only Bitcoin holds the commodity classification, leaving other cryptocurrencies, including Ethereum, outside of this designation.
The SEC Chairman further discussed the recent volatility and unconventional trading patterns exhibited by stocks like Trump Media and meme stocks. Gensler emphasized the SEC’s role in ensuring that investors receive accurate and complete information, regardless of the purpose of their investments.
It concluded that while individuals have the freedom to form their own opinions based on accurate statements, market manipulation and misleading the public are strictly prohibited.
As of the last update, Ethereum is trading at $3,066, reflecting a 2.8% increase over the past week. However, the token saw a slight decline of 0.5% over the past 24 hours, with its price potentially dependent on whether the $3,000 support level can prevent further downward moves.
Featured image from Shutterstock, chart from TradingView.com
