May 23, 2024
SEC Chair Irritated by “Outsized Ratio” Crypto Queries
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SEC Chair Irritated by “Outsized Ratio” Crypto Queries

United States Securities and Exchange Commission SEC Chair Gary Gensler, expressed frustration with the “outsized ratio” on cryptocurrency-related questions compared to traditional finance. Speaking on CNBC’s Squawk Box on May 7, Gensler highlighted the prevalence of crypto queries despite its relatively small market share compared to traditional capital markets.

Source: Squack Box/X

SEC Chair Perspective on Crypto Market and Regulation

Sec chair Gary Gensler underscored the vast difference between the $110 trillion capital market overseen by the SEC and the $2.4 trillion crypto market, emphasizing that much of the latter operates outside U.S. securities laws and is plagued by scams and frauds.

“And so thus, you end up with like an outsized ratio of journalist questions and crypto journalists to market cap.”

Gensler highlighted that the media’s ongoing interest in crypto reflects public attention, not the SEC’s primary focus. When questioned about media inquiries aligning with SEC priorities, Gensler reiterated that such attention is driven by public interest, citing numerous discussions about crypto in his appearances. the SEC boss said.

“My guessing is this will be a majority crypto interview. While the capital markets are $110 trillion. So it’s also about where the financial media is focused.”

Crypto Regulation and Legal Challenges

Gensler navigated questions regarding the SEC’s stance on crypto, evading specific inquiries about ongoing legal battles and the classification of Ether (ETH) as a security. While asserting the importance of investor protection and compliance with securities laws, Gensler faced criticism from Coinbase’s legal chief, Paul Grewal, who disputed the classification of tokens as securities.

Additionally, Gensler addressed allegations of misleading Congress regarding the SEC’s stance on ETH classification, emphasizing the agency’s discretion in disclosing investigative details. Despite criticism, Gensler maintained that the SEC’s actions and statements to Congress accurately reflect its regulatory efforts.

SEC’s Crypto Enforcement Actions and Ongoing Legal Battles

The SEC’s increased focus on crypto is evident in its six lawsuits filed in 2024 and the surge in enforcement actions against crypto firms in 2023, reaching a 10-year high. Several court cases stemming from allegations of selling unregistered securities and illegal operations are still pending, reflecting the SEC’s commitment to enforcing securities laws within the crypto space.

As regulatory scrutiny intensifies and legal battles unfold, the crypto industry faces ongoing challenges in navigating compliance and regulatory uncertainties under the SEC’s purview.

Image by Flickr

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