SEC Chairman: Crypto Industry Has a Lot of Illegal Practices and Is “Highly Concentrated”

Source: Blockchain Knight

In an interview with Bloomberg on June 25, Gary Gensler, chairman of the U.S. Securities and Exchange Commission, reiterated his previous criticism of the Crypto industry, saying that the industry is highly concentrated and there are "serious violations."

Gary Gensler downplayed the decentralization of the Crypto industry, saying that a small number of platforms are "concentrating and mixing things that we would never allow elsewhere."

Gensler cited some specific violations, such as trading against customers, front transactions, and investing before the contract is listed.

He pointed out that many of the "leaders" in the field of Crypto assets are "in jail" or "waiting to go to jail."

Gensler added: "I say this, you may sneer, but this is a serious matter, not a fuss, and it really concerns the protection of investors."

The violations mentioned by Gensler involve not only securities laws, but also the Bank Secrecy Act, the Commodity Exchange Act, and anti-money laundering laws.

Gensler said that many Crypto asset platforms work with a large number of token dealers, and according to national laws and the Supreme Court’s position, these tokens are securities without prejudgment.

The comments echoed Gensler’s previous remarks that most Crypto assets are securities.

He emphasized that tokens are offered as investment contracts and said that the American public is not aware of the law’s related disclosure requirements.

Gensler pointed out that intermediaries such as Crypto asset exchanges and brokers handle hundreds of assets, and raised a question: "Are there no entrepreneurs in the middle of these products? This is a bit illogical."

Gensler said that this problem, coupled with violations, has led the SEC to bring legal actions against numerous companies because the violations harmed the interests of the general public.

In addition, Gensler refused to answer political questions, including Mark Cuban's earlier speculation that Gensler's Crypto asset policy could cost Biden his chances of winning the election.

Gensler simply responded: "I don't talk about elections, but others can."

He also declined to comment on the broader political movement caused by Crypto assets.

Gensler did not explain the approval of the spot Ethereum ETF, which is of concern to the public, but only said that the process is "going smoothly."