With only a few days remaining until Gary Gensler steps down as Chair of the U.S. Securities and Exchange Commission (SEC), he has once again criticized the cryptocurrency sector, describing it as a space teeming with unethical behavior.

Gensler highlighted that while Bitcoin, which represents roughly 80% of the total market value, is widely understood by the public, a significant portion of the industry lacks solid foundational principles.

Beyond Bitcoin, Gensler pointed out the existence of thousands of other projects that, in his view, are overly driven by speculation rather than grounded in tangible fundamentals. “These 10,000 or 15,000 projects… I’ve never encountered an industry so heavily influenced by market sentiment rather than core principles,” he stated.

The SEC chair predicted that a substantial number of these projects would fail, likening them to high-risk venture capital investments. Additionally, he noted the prevalence of “pump-and-dump schemes” within the sector.

Reflecting on the Crypto Crackdown

Addressing his imminent departure, Gensler expressed gratitude for the opportunity to lead the SEC. He described his tenure as a “tremendous honor,” emphasizing the agency’s crucial role in regulating the vast $120 trillion capital market, which underpins the entire U.S. economy.

While his efforts to regulate cryptocurrencies have garnered significant media attention, Gensler clarified that these initiatives form only a minor fraction of the SEC’s broader responsibilities. “Enforcement actions related to cryptocurrencies make up perhaps 5% of our overall work,” he noted.

He further underscored that regulatory scrutiny of cryptocurrencies predates his tenure, mentioning that his predecessor, Jay Clayton, had pursued 80 enforcement actions in this space.

Gary Gensler, as he prepares to exit the SEC, has reinforced his critique of the cryptocurrency industry, citing its speculative nature and ethical concerns. While he acknowledged the importance of Bitcoin, he voiced skepticism about thousands of other projects, which according to him, lack a solid foundation and compared their risks to venture capital investments. 

Gensler also defended his regulatory actions, clarifying that crypto enforcement represents only a small portion of the SEC’s mission, which is to oversee the broader capital market essential to the economy.

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