The chair of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, is reportedly highlighting what he thinks is wrong with the cryptocurrency industry.
Gensler says the crypto industry is “rife with fraud and hucksters and grifters,” reports BBC.
The report further cites Gensler saying that investors around the world have “lost too much money” as a result of crypto firms refusing to follow the laws the SEC is in charge of enforcing.
“Crypto is just a small piece of the US and worldwide capital markets, but it can undermine trust that everyday investors have in the capital markets.”
Gensler also accuses crypto firms of not following longstanding rules designed to protect retail investors against bad actors looking to raise funds from the public.
“This is a field [crypto industry] that has come along, and just because they’re recording their crypto assets on a new accounting ledger, they [wrongly] say ‘we don’t think we want to comply with the time-tested laws’.”
In March, the SEC chair explained why he believes compulsory disclosures by companies looking to raise funds from the public 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.”
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