Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), has recently voiced his concerns regarding the cryptocurrency sector. According to a report by BBC, Gensler describes the crypto landscape as being “fraught with fraud, hucksters, and grifters.” He emphasizes that investors globally have suffered significant financial losses due to the failure of crypto companies to adhere to the regulations that the SEC is tasked with enforcing.
“While cryptocurrencies represent only a small segment of both U.S. and global capital markets, their existence can erode the trust that ordinary investors place in these markets,” Gensler noted. He also criticized crypto firms for neglecting established regulations meant to safeguard retail investors from unscrupulous individuals seeking to raise funds publicly.
“This industry has emerged, and despite operating on a new accounting ledger for their crypto assets, they mistakenly believe they are exempt from longstanding legal requirements,” he remarked.
In March, Gensler elaborated on the importance of mandatory disclosures for companies aiming to attract public investments. He stated, “The advantages of providing investors with access to legally mandated disclosures are manifold. First, such transparency fosters more efficient market operations and facilitates better price discovery. By offering more information, we enable prices to more accurately reflect a company’s potential.”
He went on to explain that these accurate prices are crucial as they guide capital toward its most effective applications, thus aiding in capital formation. Additionally, he stressed that transparency builds trust in the markets and with the companies that seek to raise funds from the public.
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