Gary Gensler Attributes SEC’s Focus on Crypto to Financial Media and Fraud Concerns

Gary Gensler, Chair of the US Securities and Exchange Commission (SEC), defended the agency’s attention to the crypto industry in an interview on May 7, asserting that it’s not an undue focus but rather a response to the prevalence of scams and frauds within the sector. ,Speaking with CNBC
, Gensler emphasized that while crypto represents a small portion of the financial markets, it disproportionally contributes to issues such as scams and frauds, attracting significant media attention.,


Gensler pointed out that the financial press amplifies coverage of crypto-related matters compared to traditional securities markets, leading to a heightened perception of the industry’s importance. ,“We oversee a $110 trillion capital market. Crypto is a small piece of our overall markets, but it’s an outsized piece of the scams, frauds and problems in our markets,” Gensler said..,He noted that the volume of questions from journalists regarding crypto relative to its market capitalization reflects this heightened attention from the media.,The SEC’s enforcement actions in the crypto space have increased, with 46 crypto-related enforcement actions initiated last year, marking a surge from previous years.,”You end up with an outsized ration of journalists questions…to market cap; it’s also a function of where the financial media is focused,” he said.,According to analyses by Cornerstone Research and the law firm Gibson Dunn, however, these actions are a fraction of the total enforcement actions conducted by the SEC, which amounted to 501 last year.,


SEC Chair Gary Gensler stressed the necessity of transparency in crypto markets
, advocating for mandatory disclosure to combat some industry participants’ evasion of registration requirements. ,He cited Supreme Court Justice Louis Brandeis’ famous quote, “Sunlight is said to be the best of disinfectants,” to emphasize the importance of transparency.,Gensler’s remarks come amid the SEC’s intensified efforts to regulate the crypto industry, evidenced by multiple lawsuits filed against prominent crypto firms and figures like Sam Bankman-Fried, Binance, its CEO Changpeng Zhao, and Coinbase. ,These actions reflect Gensler’s stance that most cryptocurrencies should be classified as securities, aligning with the SEC’s regulatory approach.,While the SEC’s scrutiny has sparked calls for more explicit regulatory guidelines to foster innovation within the U.S., the agency continues its campaign to potentially classify Ethereum as a security, issuing subpoenas as part of this effort. 
Gensler emphasized the importance of registration requirements to ensure mandatory disclosure, characterizing it as essential for maintaining market integrity.,Gary Gensler’s Big Concern