Cryptocurrency insiders have criticized outgoing Securities and Exchange Commission (SEC) Chairman Gary Gensler for his continued hostility toward the crypto industry.
In a recent interview with Bloomberg, Gensler reiterated his concerns about emerging industries, claiming they are “infested” with bad actors.
Gensler defends SEC legacy
He said that under his leadership, financial regulators have made significant progress in policing this area.
He noted that the SEC’s regulatory efforts under his leadership resulted in nearly 100 enforcement actions initiated during his tenure. He emphasized that these efforts build on the 80 actions taken by his predecessor, Jay Clayton.
The outgoing SEC chairman also cited high-profile enforcement cases, including cases against figures like Sam Bankman Freed, as evidence of the agency’s commitment to investor protection.
Furthermore, Gensler characterized the crypto industry as overly speculative and argued that it lacks the strong fundamentals of the traditional financial sector.
He compared most crypto projects outside of Bitcoin, estimated to be 10,000 to 15,000, to venture capital efforts with minimal return for investors and high risk. Gensler said:
“I have been involved in the financial industry for over 40 years, and everything in the market is traded based on a combination of fundamentals and sentiment. At no time have we been so focused on fundamentals and so focused on sentiment. I have never seen a field like that.”
Mr. Gensler will leave his position on the committee on January 20th.
Industry backlash
Gensler’s comments prompted criticism from key figures in the cryptocurrency industry.
Coinbase Chief Legal Officer Paul Grewal accused Gensler of alienating voters and suggested that Gensler’s “arrogance” contributed to political shifts in battleground states during recent elections. .
Mr Grewal said:
“In battleground state after battleground state, his arrogance has mobilized thousands of the people he claims to protect to reject this administration. And yet, there is zero remorse or introspection.”
Bill Morgan, a pro-crypto attorney, went further, arguing that the SEC itself is “filled with bad actors.”
These comments highlight long-standing tensions between the crypto industry and the SEC, led by Gensler.
Under Gensler’s leadership, the agency targeted major cryptocurrency companies such as Binance and Coinbase. According to a report by the Blockchain Association, these actions cost the industry more than $400 million in legal fees.
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