SEC Chair Gary Gensler Calls Crypto 'Wild West' Asset Class 'Rife With Fraud'

U.S. Securities and Exchange Chairman Gary Gensler outlined a number of concerns with the crypto market to members of the U.S. Senate.

What Happened: In Sept. 14 testimony before the Senate, Gensler raised concerns about a number of crypto companies operating outside the regulatory framework and the lack of investor protections in place.

“Frankly, at this time, it’s more like the Wild West or the old world of 'buyer beware' that existed before the securities laws were enacted. This asset class is rife with fraud, scams and abuse in certain applications,” said Gensler.

“We can do better,” he added.

With respect to investor protection, Gensler said the SEC is working with the Commodity Futures Trading Commission because both agencies have relevant and sometimes even “overlapping jurisdiction” in crypto markets.

“I’ve suggested that platforms and projects come in and talk to us. Many platforms have dozens or hundreds of tokens on them. While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that, with 50, 100 or 1,000 tokens, any given platform has zero securities,” he said.

Earlier this month, Coinbase Global Inc COIN CEO Brian Armstrong said the SEC refused to explain why the platform's "Lend" product was considered a security.

Armstrong also said the regulator refused to meet with him while he was in Washington, D.C. earlier this year. The SEC reportedly told Armstrong it was “not meeting with any crypto companies.”

BTC Price Action: The leading digital asset Bitcoin BTC/USD is trading at a price of $42,857.98 midday Tuesday, down 1.66% over 24 hours.