WASHINGTON, D.C. – U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler’s crackdown on cryptocurrency is striking a blow against widespread fraud, manipulation, deceptive practices, rule evasion, and other corrupt activities endemic within the sector, 13 groups led by Public Citizen said in a letter today thanking the chair.
“We believe that cryptocurrency has failed to prove its value as a currency for widespread legitimate transactions – despite 15 years of effort since publication of the white paper that introduced Bitcoin,” the letter reads. “We strongly support greater funding for the SEC to continue this important work as you strive to combat widespread abuses in the crypto sector.”
Gensler has correctly recognized that, in effect, crypto firms are issuing unregistered securities and acting as unregistered exchanges, brokers, or other regulated financial intermediaries. These firms and crypto enthusiasts have perpetrated a massive Ponzi scheme, disproportionately harming people of color and those with modest incomes.
The crypto balloon has been inflated by influencers, many surreptitiously paid; massive advertising campaigns that were funded through crypto firms’ misuse or theft of customer funds; and a rogues gallery of online crypto enthusiasts, some of whom have a self-interest in inflating the price of tokens.
Gensler’s efforts to combat these hucksters have led to tens of millions of dollars in fines and stopped a number of firms from providing risky or harmful products and services. “We appreciate your resolve and your focus on ensuring existing securities laws are applied fairly, consistently and rigorously in order to protect investors and markets,” the groups said.