Gary Gensler: “cryptocurrencies are often used for fraud”

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Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC), has called for increased protection for cryptocurrency investors amid the growth of the digital asset market.

As Gary Gensler told the Investor Advisory Committee, the growth of the cryptocurrency market requires this asset class to be part of government policies related to “caring for investors, protecting against illegal activity, and protecting financial stability.”

“This asset class is often used for fraudulent activities in some applications. In many cases, investors cannot get accurate, balanced and complete information about tokens or trading and lending platforms. ”

He acknowledged that the SEC currently lacks the resources to protect investors in the cryptocurrency market, especially in the DeFi sector.

“The American public buys, sells and lends cryptocurrency on trading, credit and decentralized financial platforms where there are significant gaps in investor protection.”

Gensler warned that DeFi is leaving markets open to manipulation. This makes investors vulnerable. Therefore, if regulators do not address transparency issues, many investors will suffer.

The SEC chief explained that many tokens are “offered and sold as securities.” However, he does not consider the token to be a security. In his opinion, securities are stocks, bonds and bills. There are only about 20 positions that Congress recognized as securities in the 1930s.

The SEC chairman noted that many tokens in cryptocurrency markets “can be unregistered securities without mandatory disclosure or market surveillance.”

Gensler recently described Bitcoin as a stand-alone alternative and competitor to the traditional US banking system. In October, SEC Commissioner Caroline Crenshaw urged DeFi projects to work with regulators to address transparency and anonymity issues.

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