Gary Gensler Targets Crypto Industry for Compliance Issues

Gary Gensler’s remarks come amid increasing scrutiny of the crypto sector, with potential implications for platforms like Ethereum.

Chairman of the U.S. Securities and Exchange Commission, Gary Gensler, singled out the cryptocurrency industry as a problem in his Friday speech regarding the “public welfare” of securities disclosures.

According to Gary Gensler, the former head of the agency has led a legal battle against an industry that he considers predominantly non-compliant.

He suggested that digital asset companies are among those attempting to “economize on the SEC’s disclosure regime,” which mandates that firms register securities and furnish investors with relevant information.

“Participants in the crypto securities markets are attempting to circumvent these registration requirements,” he stated in prepared remarks for a Columbia Law School event. “Without registration, disclosure is not required.”

Gensler stated, “Many would concur that the cryptocurrency markets could use a little disinfectant.”

Several enforcement actions are being pursued by the regulator against Coinbase Inc. and Binance, among others, whom it accuses of failing to register as exchanges and listing unregistered securities.

In contrast to Bitcoin, it is reportedly investigating Ethereum (ETH), possibly contemplating classifying that asset as a security.

Gary Gensler’s Call for Regulatory Clarity

Gensler’s assertion that registration is mandatory for cryptocurrency platforms could be tested shortly.

Prometheum, the first company to clear the requirements to become an authorized special-purpose cryptocurrency broker-dealer, is preparing to launch its operations, according to company executives.

Coinbase, meanwhile, has petitioned an appeals court to compel the SEC to undertake crypto-specific rulemaking.