• US Securities and Exchange Commission (SEC) chair, Gary Gensler, has raised concerns about the pervasive fraud and regulatory non-compliance in crypto.
• Gensler warned investors to remain vigilant and not assume they will be fully safeguarded under existing securities law.
• He urged investors to be wary of exchanges that may not be following the rules that traditional exchanges adhere to.

SEC Chair Warns Of Fraud & Non-Compliance In Crypto

US Securities and Exchange Commission (SEC) chair, Gary Gensler, is concerned about the pervasive fraud and regulatory non-compliance in crypto. In a recent Bloomberg interview , he aired his concerns about the risks associated with crypto investments. His comments come on the back of an impactful court decision related to XRP’s status as a security, which ran contrary to the commission’s viewpoint.

Investors Not Getting “Full & Fair Disclosure”

During the interview, Gensler expressed concerns about Crypto investors not getting “full & fair disclosure”, as well as platforms and intermediaries doing things that would never be allowed or thought of on traditional stock exchanges like NASDAQ or NYSE. He also raised concerns over exchanges’ practices, claiming that they are “often commingling and trading against you and have market makers that are on the other side of your trades.”

Enforcement First Policy Under Fire

The SEC chair’s stern warning aligns with the SEC’s enforcement-first stance, a policy that has been under fire due to perceived regulatory uncertainty. This was highlighted when Ripple sued for allegedly violating its Fifth Amendment rights by failing to give it clear guidelines on how it should approach its token issuing activities prior to their suit against them.

“Good Faith Actors” Outnumbered

Gensler acknowledged the presence of “good faith actors” in the industry but warned that they are heavily outnumbered by those trying deceive others or engaging in fraudulent activities. He urged investors to remain vigilant so as not to fall prey to such schemes while investing in crypto markets.

Risk Of Losses Remains High

Finally, Gensler warned investors about taking risks with their investments in cryptocurrencies regardless of whether there is potential for gain or loss involved – stressing that even though securities laws should ideally offer some degree of safeguard, there still remains a high risk of losses if caution is not taken when investing in these markets

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