SEC Chair Gary Gensler Takes Another Swipe at the Crypto Sector, Says Digital Asset Firms Avoid Disclosure Laws

Gary Gensler thinks some crypto firms skirt mandatory disclosure requirements.

The chair of the U.S. Securities and Exchange Commission (SEC) recently spoke to the Columbia Law School Conference and laid out the reasons why he believes mandatory disclosure requirements for companies are important.

“The benefits from investors having access to disclosure required by laws and rules are numerous. First, disclosure promotes more efficient markets. It promotes better price discovery. Providing more information results in prices that more accurately reflect a company’s prospects.

Second, such prices provide valuable signals, helping capital flow to its most productive use, and thus promoting capital formation.

Third, disclosure promotes trust in markets and the companies that are raising money from the public.”

Gensler also argues that some participants in the “crypto securities markets” seek to avoid public offering registration requirements.

“No registration means no mandatory disclosure. Many would agree that the crypto markets could use a little disinfectant.”

The SEC chair made headlines earlier this month after declining to answer when asked whether the top smart contract platform Ethereum (ETH) counted as a security or a commodity.

“Any one of these crypto tokens is about the facts and circumstances as to whether the investing public is anticipating a profit based on the efforts of others, but we do have fillings in front of us. I’m not going to comment.”

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