Gensler said that the SEC has taken 780 enforcement actions, including 500 individual cases, and paid out $930 million in compensation to affected investors.
At the 2023 Securities Enforcement Forum, SEC Chair Gary Gensler discussed the agency’s enforcement efforts, which resulted in $5 billion in judgments and orders. When Gensler made the comment, “Don’t get me started on crypto.” in reference to the cryptocurrency industry, it quickly became a topic of discussion among crypto enthusiasts on Reddit and other social media platforms.
When discussing the financial impact of the SEC’s enforcement actions, Gensler mentioned the agency’s filing of over 780 actions in 2023, including over 500 individual cases. There was a total of $5 billion in judgments and orders from the enforcement proceedings, of which $930 million was paid out to the affected investors.
According to Gensler, the SEC has fined 40 companies over $1.5 billion for breaking numerous rules and regulations since December 2021. According to Gensler, the SEC reached settlements with 23 companies in the past fiscal year for violations relating to recordkeeping.
The head of the SEC reaffirmed his previous crypto position in his address, arguing that the vast majority of the cryptocurrency market is comprised of securities and hence must be regulated as such. Gensler, in defining security broadly, discussed investment contracts and how they are similar to a large portion of the bitcoin industry. Most bitcoin assets, says Gensler, will qualify as investment contracts and so fall within the purview of securities laws.
Gensler went on to make parallels between the present state of the crypto ecosystem and the financial climate of the 1920s, when securities rules did not exist. According to Gensler, the crypto ecosystem is plagued by the same lack of regulation that plagued the banking sector before the advent of blockchain technology. He claimed that tighter rules are needed to deal with these problems.
According to one expert, “without prejudging any one asset, the vast majority of crypto assets likely meet the investment contract test, making them subject to securities laws.”
Gensler’s critique of the cryptocurrency market is not new; the firm has had this view for a long time. Members of Congress, the crypto community, and a few major U.S. firms have all asked Gensler to clarify crypto rules.
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