SEC Chair Gary Gensler Criticizes Cryptocurrency Sector, Says World Has Enough Digital Currencies
Lawsuits Targeting Coinbase and Binance Follow Gensler's Declaration, Fueling Regulatory Tensions
Thu, 08 Jun 2023, 11:19 am UTC
The outspoken leader of the Securities and Exchange Commission (SEC), Gary Gensler, has long displayed a skeptical stance towards the cryptocurrency sector. His recent declaration leaves no room for ambiguity - he believes the world has a sufficient number of digital currencies and should refrain from seeking more. This statement coincided with news of the SEC filing a lawsuit against Coinbase, the second-largest exchange globally, and was followed by legal action against Binance and its founder.
Gensler, the prominent regulator, is known for his candidness, and his sharp criticism of the cryptocurrency industry has reached new heights. The SEC's lawsuits against leading cryptocurrency exchanges, launched in rapid succession, have made for an eventful week in the regulatory arena.
In his first major interview since these unprecedented regulatory moves, Gensler took a firm stance against the cryptocurrency sector.
During a CNBC interview, Gensler made a notable comment, suggesting that additional digital currencies were unnecessary. He pointed to the existence of digital versions of traditional currencies, such as the US dollar, euro, and yen, and highlighted the abundance of digital investment opportunities in sectors like technology and automobiles. This statement seemingly contradicts his assertion to CNBC host Carl Quintanilla that the SEC operates without bias, raising questions about his position on digital currencies.
The week commenced with the SEC filing a lawsuit consisting of 13 charges against Binance and its founder, Changpeng Zhao (commonly known as "CZ"), accusing them of securities law violations. This was followed by a lawsuit against Coinbase, alleging that it operated as an unregistered broker.
Both exchanges hold significant stature in the cryptocurrency world, accounting for over $11 billion in spot market trading volume in just 24 hours. They vehemently deny the allegations.
This flurry of legal activity takes place amidst ongoing litigation between the SEC and Ripple, the issuer of XRP, further intensifying the atmosphere in the crypto realm. The central issue revolves around determining the classification of digital assets as securities, and the outcome of the case is expected to have a profound impact on the US digital asset market, providing greater clarity to the industry.
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