Markets
Cryptocurrencies are ‘a huge piece of scams and problems’ in markets: Gary Gensler – Coinbase Glb (NASDAQ:COIN)
Highlighting the disproportionate amount of fraud and scams within the relatively small cryptocurrency industry compared to its size in the broader market, SEC Chairman Gary Gensler Tuesday highlighted the agency’s focus amid the rapid market expansion.
What happened: “We are looking at a $10 trillion capital market,” Gensler noted, clarifying that “cryptocurrencies are a small part of our markets, but they are a huge part of the scams, frauds and problems in our markets” .
In an interview with CNBC, he stressed that without adequate regulatory frameworks, these problems will likely persist, underscoring the need for robust oversight.
Gensler’s remarks reflect current concerns about the compliance of various crypto tokens with existing securities laws. He pointed out, “Much of this field does not comply with the protections of our securities laws,” which contributes to a higher ratio of emissions to market size.
During the interview, Gensler addressed recent actions taken by the SEC, including ongoing litigation against CoinBase COIN, which he referred to to illustrate the SEC’s role as “cop on duty.”
He said: “We have a really important responsibility… to ensure that people who ask you to invest your money in buying or selling securities comply with the law.”
The discussion also touched on the broader implications of these regulatory measures for everyday investors, particularly those using platforms such as Robin Hood HOOD.
Read also: Hightower, $130 Billion Asset Manager, Debuts $68 Million Spot Buy of Bitcoin ETFs
Gensler advised caution, reminding viewers that many crypto tokens could be considered securities under laws interpreted by the U.S. Supreme Court, thus requiring adequate disclosure that is currently lacking.
A focal point of the cryptocurrency discussion centered on whether Ethereum could be classified as a commodity or a security, which would have a significant impact on the potential for a Ethereum ETF based on ETH/USD.
Gensler did not provide a definitive answer but reiterated his commitment to investor protection: “The fundamental question is how do we ensure that the American investor is protected?”
What’s next: This continued regulatory focus is timely as the financial community looks forward to Benzinga’s The future of digital assets event on November 19th.
The event is intended to delve deeper into these very questions, exploring the impact of regulatory decisions on the future landscape of digital assets.
Insights from leaders like Gensler will be crucial for participants looking to navigate the complexities of investing in cryptocurrencies in the midst evolving regulatory frameworks.
Read next: Spot Bitcoin ETFs saw net inflows of $217 million on Monday
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