US SEC Chief Gensler: Crypto Sector ‘Non-compliant’

Gary Gensler, the head of the United States Securities and Exchange Commission (SEC), has stated that his agency will “do what we can” to ensure crypto operators fall into line, despite his opinion that many are refusing to adhere to the rules governing securities. During an interview with Bloomberg TV, Gensler stated that many operators’ business activities fell under “classic parts of the securities laws,” but that these companies were not abiding by the regulations. Gensler’s comments were made in reference to the fact that these companies were not playing by the rules.

He said:

“Without prejudging any one platform or any one token, there’s a lot of non-compliance. Meaning that if you raise money from the public, and that public is anticipating, based on your efforts, some profit – that comes into the securities laws.”

He singled out cryptocurrency lending platforms in particular, noting that “lending platforms are managing the money managing the crypto” – and that “those are the classic parts of the securities laws” – as the target of his criticism. Cryptocurrency lending platforms have had a particularly difficult few months.

Gensler underlined that “far too many” cryptocurrency lending sites “haven’t come in to basically comply with the law and register” with the Securities and Exchange Commission (SEC).

In addition, he admitted that the SEC needed to improve itself in order to fulfill its mission of “protecting the public,” and he continued:

“I think that there is a need at the [SEC] to […] work through some of these things with these trading and lending and brokerage platforms.”

Gensler was also of the opinion that the cryptocurrency industry will struggle to thrive in the long term in the absence of “basic protections,” and he explained: “If the crypto sector is going to persist, it’s only with trust. Otherwise, a lot of people will get hurt.”

He reiterated claims that the “vast majority” of tokens now available on the market “have the attributes of a bunch of promoters and sponsors raising money from the public and the public then needing certain protections.”

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And when Gensler was pressed on the question of whether the SEC would follow up with a fresh round of regulatory guidelines for the sector, he refused to commit to one way or the other. Instead, he stated that the agency would “continue to work” with players in the sector and would “continue to bring robust enforcement actions as well.”