Gary Gensler has once again commented on the prevalence of fraud in the crypto sphere.
Gary Gensler has once again commented on the prevalence of fraud in the crypto sphere.

The digital currency industry is rife with cases of deception, fraud, financial collapse, and money laundering. This opinion was expressed by the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, as reported by The Block.

He described the scandals emerging in the industry (the collapse of FTX, Three Arrows Capital, and others) as "obvious."

“Even though many companies claim to operate outside the boundaries of regulatory acts issued before the famous Bitcoin white paper by Satoshi Nakamoto, they still turn to the courts for bankruptcy matters,” Gensler noted.

The SEC representative reminded that companies are obliged to comply with the existing rules for traditional finance. In his opinion, the industry still faces problems due to "universal non-compliance with regulatory requirements."

"There is no reason to think that investors and issuers in the crypto markets need less protection by securities laws. Congress could have said in 1933 or 1934 that they only apply to stocks and bonds. However, a wide list of items, including 'investment contract', was included in the definition of a security in the regulatory acts," Gensler emphasized.

In September, the SEC Chairman faced harsh criticism from legislators during a presentation in the House of Representatives. Congressmen questioned the official about the agency's policy regarding digital assets and requested information about the timelines for approving Bitcoin ETFs.

A month earlier, House of Representatives member Warren Davidson had called for Gensler to be removed from his position as head of the Commission due to the unsuccessful outcome of the case against Grayscale. This was preceded by a partial defeat of the regulator in the legal process against Ripple.

Later, the media criticized the SEC chairman, accusing him of turning the agency into a "banana republic."

Previously, Gensler had stated that all digital assets, except for Bitcoin, should be classified as securities.

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