SEC Chair Gary Gensler reaffirms his stance on crypto “rife with fraud, scams, bankruptcies, and money laundering.”

SEC Chair Gary Gensler has reiterated his view that many cryptocurrencies are securities and should comply with existing laws, in a speech at the 2023 Securities Enforcement Forum on Wednesday.

Gary Gensler said he was not surprised by the resistance from the crypto industry, which he described as “rife with fraud, scams, bankruptcies, and money laundering.” He said that crypto investors and issuers deserve the same protections as those in traditional finance, and that Congress intended the securities laws to apply to a broad range of assets, including “investment contracts.”

Gensler also mentioned some of the cases the SEC has brought against crypto firms, such as Coinbase and Binance, for allegedly violating securities laws. He said that the agency often uses the Howey Test, a 1946 Supreme Court case, to determine whether a transaction is an investment contract. However, he acknowledged that some crypto firms have challenged the SEC’s interpretation of the Howey Test.

Representing about 1/4 of @SECGov staff, our Division of Enforcement investigates possible wrongdoing in our markets, and when appropriate recommends that the SEC bring charges. The division’s lawyers also represents the SEC in court on behalf of the American people.

Watch 🎥⬇️ pic.twitter.com/n6Xfdn23CR

— Gary Gensler (@GaryGensler) October 25, 2023

Gensler’s speech came amid speculation about the status of bitcoin ETF applications, which the SEC has not yet approved. He did not comment on any specific applications, but he said that the SEC is open to innovation and welcomes dialogue with crypto stakeholders.