SEC Chair Warns of Crypto Fraudsters: Most Tokens Qualify as Securities
• SEC Chairman Gary Gensler says crypto industry is teeming with criminals and illicit activities.
• Gensler reiterates the SEC’s stand that most digital tokens are securities and must be registered with the SEC.
• The regulator has filed multiple charges against two top crypto exchanges (Binance and Coinbase) for allegedly violating federal securities and investor protection laws.
SEC Chair Warns of Illicit Crypto Activities
The Chair of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has warned about the prevalence of “hucksters, fraudsters, scam artists, Ponzi schemes” in the cryptocurrency industry. Speaking at a recent conference in New York City, Gensler said that it reminded him of the 1920s when there were practically no federal securities laws to protect investors from manipulation or fraud. He also reiterated that most digital tokens qualify as securities under existing regulations and should be registered with the SEC accordingly.
SEC’s Stand on Crypto Tokens
The SEC maintains that most cryptocurrencies are securities under existing regulations and must therefore be registered with them if they are to be traded legally in the US markets. Furthermore, intermediary services such as exchanges must also comply with all relevant federal securities laws to ensure that investors do not become victims of fraud or manipulation due to lax oversight.
Charges Filed Against Exchanges
In line with this stance, the regulator has recently filed multiple charges against two top crypto exchanges – Binance and Coinbase – for allegedly violating federal securities and investor protection laws. Binance was accused of operating without registering itself as an exchange while Coinbase was charged with operating as an unregistered exchange, broker, and clearing agency without first obtaining proper authorization from the SEC.
Protecting Investors From Fraudulent Activities
Gensler highlighted that one of the main roles of the SEC is to protect investors from fraudulent activities within crypto projects by providing rules against fraud and manipulation as well as disclosures about any potential risks associated with investing in those projects before any trades are made. He said that these protections would help prevent investors from becoming victims when those projects inevitably implode due to mismanagement or misconduct on behalf of their operators or sponsors.
Conclusion
The stern stance taken by Gensler shows just how serious regulators are taking illegal activities within crypto markets – especially those involving fraudulent ICOs or exchanges which fail to adhere to proper compliance measures set out by regulatory bodies like the SEC
