Crypto sector is rife with 'fraud' and 'hucksters,' warns SEC chair Gary Gensler
- SEC chair Gary Gensler warned investors about the lack of regulation for cryptocurrencies.
- He told Bloomberg TV the sector was rife with "fraud" and "hucksters," leaving investors at risk.
The Securities and Exchange Commission chair is continuing to take aim at the cryptocurrency sector despite a legal blow in its battle with the Ripple platform.
The decentralized nature of cryptocurrencies has made regulation a headache for the SEC.
Gary Gensler warned investors Thursday to consider the lack of full regulatory oversight for crypto, which he said was "rife with fraud, rife with hucksters."
He told Bloomberg TV that "investors should be aware that it's not only a highly speculative asset class, it's also one that they currently should not assume that they're getting the protections of the securities laws – even though those securities laws apply to many tokens.
"You as investors are not getting full, fair, and truthful disclosure, and the platforms – the intermediaries, are doing things we would never in a day or allow the New York Stock Exchange or Nasdaq to do."
Gensler was particularly critical of crypto exchanges, following the collapse of FTX last year, and SEC action against other firms such as Ripple and Binance.
"The platforms often are co-mingling and trading against you and have market-makers that are on the other side of your trades. We don't allow that in the rest of our securities markets," he told Bloomberg.
"The securities laws are there to protect you, and this is a field rife with fraud, rife with hucksters. There are good-faith actors as well, but there are far too many that aren't."
Earlier this month a US judge ruled that Ripple did not break securities law by selling its XRP token on public exchanges.
The decision, which sent the value of the token soaring, was the first win for a crypto company in a case brought by the SEC, Reuters reported.