While speaking at a Twitter space hosted by US Army on Jan. 11, SEC chairman Gary Gensler reaffirmed his skepticism about crypto when he described the crypto industry as a Wild West. He claimed traders must exercise caution because most cryptos operate at variance to existing laws.
In a session titled “Financial advice for US service members,” Gensler stated that most cryptocurrencies lack proper regulatory compliance and use cases. According to him, up to 15,000 tokens could fail because venture capital will fail. He added that new startups would probably be unsuccessful because the status quo has little room for micro currencies.
Gensler’s latest criticism of cryptocurrencies reveals important issues for the SEC and shows how crypto tokens can be treated as securities if they only come under the agency’s jurisdiction.
Gensler’s office has taken several enforcement actions, most recently deeming FTX’s native FTT exchange token as a security.
In his statement before the US Senate Committee on Banking, Housing, and Urban Affairs in September, the SEC chairman also warned crypto intermediaries advising them that they should register with the commission.
The SEC chair advised listeners to stay away from the crypto market. He claimed that it’s very simple to succumb to fear of missing out (FOMO) since asset values have been rising, causing an increase in tweets and mentions of terms like altcoins and altcoin season in the crypto media.
Based on previous history, Gensler claimed that price pumps like this always attract FOMO because if it tops form, the situation reverses only when the crowd begins to have second thoughts.