Departing Gary Gensler: Crypto is ‘rife with bad actors’

SEC Chairman Gary Gensler reiterated his long-standing critique of the cryptocurrency industry, calling it “rife with bad actors” during a Bloomberg TV interview on Wednesday. 

Reflecting on his tenure, Gensler said he was proud of the SEC’s enforcement actions in the crypto space, noting their consistency over the years.

Gensler highlighted the foundation laid by his predecessor, Jay Clayton, who spearheaded 80 crypto-related enforcement actions from 2017 to 2020. During Gensler’s four-year leadership, the SEC initiated approximately 100 actions, maintaining a steady approach to tackling fraud and misconduct in the rapidly evolving sector.

Crypto is less than 1% of U.S. financial markets, yet it’s riddled with “scams,” Gensler said. 

“I’ve never seen a field that is so wrapped up in sentiment and not so much about fundamentals,” Gensler said. “Of these 10,000 to 15,000 projects, many of them will not survive. They’re like venture capital investments. They’re not going to survive.”

Gensler’s comments come as he prepares to step down on January 20, the day of President-elect Donald Trump’s inauguration. 

Gensler and Crypto

Biden-appointed Gensler has vocally expressed skepticism toward crypto regulation. He came out forcefully against the FIT21 bill after it was passed in the House. 

The relationship between the crypto industry and Gensler has been contentious. The industry mostly views Gensler with skepticism and frustration. Many believe his strict enforcement approach and classifying most crypto assets as securities have stifled innovation and created legal uncertainty​. 

Gensler repeatedly asserted that most cryptocurrencies qualify as securities, urging firms to register with the SEC.

Critics within the industry argue that compliance is impractical due to regulatory frameworks designed for traditional financial entities.

Reflecting on his tenure, Gensler acknowledged the challenges but emphasized the SEC’s role in building on prior efforts. 

“I’m proud of what we’ve accomplished, but there’s still work to be done,” he said.