SEC's Gensler stays true to form, uses Wednesday speech to say crypto is full of 'fraud, scams, bankruptcies and money laundering'
Securities and Exchange Commission Chair Gary Gensler is standing firm in his long-held view that many cryptocurrencies are subject to existing securities laws, despite pushback from the industry. Gensler, who has also said that crypto firms are subject to the same rules as traditional finance, reinforced his view on Wednesday in prepared remarks at the 2023 Securities Enforcement Forum. His comments came amid a week of rabid speculation about the status of pending applications for spot bitcoin ETFs.
The agency has brought numerous cases against crypto firms over the past year, including ones against U.S.-based Coinbase and the world's largest crypto exchange, Binance. In those lawsuits, the agency often cites the Howey Test, a 1946 U.S. Supreme Court case involving citrus groves to determine whether transactions are investment contracts and thus subject to securities laws. However, that approach has garnered criticism from some, including Coinbase, which has said the SEC stretched its arguments in Howey "beyond recognition." Gensler also spoke in general about charges the SEC has brought against others, including a case involving the former CEO of McDonald's. "And don’t get me started on crypto," Gensler said. "I won’t even name all the individuals we’ve charged in this highly noncompliant field."
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