SEC Chief Gary Gensler Calls for Stricter Crypto Regulations, Highlights $5 Billion in Enforcement Actions
Summary:
Gary Gensler, the U.S. Securities and Exchange Commission (SEC) chief, explained the SEC's enforcement actions levying $5 billion in judgments and orders at the 2023 Securities Enforcement Forum. Gensler’s comments about the cryptocurrency market triggered extensive discussion within the crypto community. He divulged that the SEC had undertaken more than 780 enforcement actions in 2023, including over 500 individual cases, resulting in $5 billion in judgments, of which $930 million was returned to wronged investors. He restated his position that the majority of the crypto market falls under securities laws, comparing the current state of crypto to the financial landscape of the 1920s before clear regulations were implemented.
During his address at the 2023 Securities Enforcement Forum, Gary Gensler, head of the U.S. Securities and Exchange Commission (SEC), provided insight into the commission's enforcement activities that resulted in $5 billion in judgments and orders. His comments on the cryptocurrency segment, however, sparked considerable chatter among the digital asset sector on social media. Gensler pointedly remarked, “I won't go into detail about crypto. I won't list every individual we've taken to task in this notoriously non-compliant area.”
Gensler also discussed the financial implications of the SEC’s enforcement efforts, mentioning that the organization launched over 780 enforcement actions in 2023, which included more than 500 standalone cases. The SEC was able to secure $5 billion through these actions, effectively redistributing $930 million back to victims.
His remarks also revealed the extensive legal action taken by the SEC, with 40 distinct firms being sued for different regulatory infringements since December 2021. The lawsuits yielded over $1.5 billion in fines. Gensler mentioned that 23 firms settled charges regarding record-keeping violations within the last fiscal year alone.
The head of the SEC reaffirmed his view regarding cryptocurrencies, asserting that the bulk of the crypto industry is subject to securities regulations. He delved into the concept of “investment contracts” to clarify why a significant portion of the cryptocurrency sector falls under it. Gensler believes most cryptocurrencies will be subjected to the same examination and, subsequently, the same rules.
Comparisons were also drawn between the current state of crypto and the era predating securities laws. Gensler argued that the crypto industry is facing similar challenges brought on by the absence of clear regulations, resulting in numerous scams, fraud, and collapses. Gensler posits that this is a clear indication of the need for stricter rules.
It's worth noting that Gensler’s critique of cryptocurrencies is not a new development, but a viewpoint he consistently held for years. Despite Gensler's take on cryptocurrencies, key businesses in the sector as well as Congress members have called for further clarification on cryptocurrency rules.
Published At
10/26/2023 12:32:38 PM
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