Good day everybody,
Welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at a recent interview between the Chair of the US Securities and Exchange Commission (SEC) Gary Gensler, and Bloomberg. Within the interview Gensler brought up his concern over fraud within the crypto market, along with talking about the recent case with Ripple.
Gensler Concern
Chair of the SEC Gary Gensler has voiced his concerns over the prevalence of fraud in the crypto market during an interview with bloomberg on the 27th of July 2023. Within, he noted how the crypto market is "rife with fraud, rife with hucksters." Gensler was quick to note that while there are good actors within the space, there are also far too many bad actors.
He went on to emphasize that the speculative nature of the industry is not the sole challenge for investors. Instead, potential investors need to be aware that they are likely not getting any of the securities laws protection that would apply to other investments, even though many of these laws apply to a multitude of cryptocurrencies.
"US investors are not getting full, fair, and truthful disclosures. And the platforms, the intermediaries are doing things that we would never allow or think the New York Stock or Nasdaq would do."
Gensler also added that crypto platforms are not compliant with laws that protect customers from fraud:
"There’s a lot of noncompliance in this field. The platforms themselves, where trading is occurring of various crypto tokens, currently they’re not necessarily compliant with those time-tested protections against fraud and manipulation."
When the topic of the SEC vs Ripple case was brought up, where a US court ruled in favour of Ripple not being a security when sold to retail investors, Gensler had little to say on the topic. He made it clear he is merely one of five at the commission, and if they decide together that an appeal is required, then it may happen down the line.
The ruling by the District Court for the Southern District of New York stated that the “offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts.” However, it was also ruled that XRP did meet the conditions set in the Howey Test and therefore is considered a security when sold to institutional investors.
An extract from the interview is available in the Tweet below.
Have a great day.
Peace. CryptoGod-1.
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