In an interview with David Gura on Bloomberg Markets on Wednesday, outgoing Securities and Exchange Commission (SEC) Chair Gary Gensler reviewed his tenure and the role of crypto within the US capital markets. Gensler, who has less than two weeks left in his term, remained steadfast on his stance toward the digital asset space, calling it “rife with bad actors” and stressing that “many of them will not survive.”
Crypto Is Still The ‘Wild West’
Gensler began by addressing the criticism he has faced during his tenure. “It’s a great privilege to be in a role like this,” he said, highlighting that he is the 33rd SEC chair and credits President Joe Biden for the appointment. “You walk into this central square and you debate these important things for 330 million Americans,” he added.
Asked whether the level of scrutiny he has experienced is different compared to his time as head of the Commodity Futures Trading Commission (CFTC) during the global financial crisis, Gensler acknowledged, “It does change.” However, he maintained that the commission’s chief focus remains “looking out for everyday Americans, trying to lower the cost of the markets […] It doesn’t surprise me that there’s some in the middle of the market who[…] might have thoughts on that and object.”
Turning to crypto, Gensler echoed a theme he has repeatedly underscored since taking office: The digital asset industry accounts for less than 1% of the US capital markets—he placed the entire capital market at roughly “$120 trillion”—yet it has demanded significant SEC attention.
He stood by his earlier “Wild West” depiction of crypto, pointing out, “It’s a field that built up around non-compliance.” He also invoked the enforcement actions pursued under both his tenure and that of his predecessor, Jay Clayton. “Jay brought 80 enforcement actions in this area. We’ve brought in about 100 in our four years,” Gensler said. “It’s maybe about 5% of what we do in our law enforcement,” he noted, explaining that the remaining 95% targets traditional scammers and fraudsters.
Highlighting how sentiment-based and volatile the space is, Gensler divided the digital asset world into two parts: “This field, it’s rife with bad actors. Let me just split the field into two just for a minute. The public knows a lot about Bitcoin, which depending upon its market value on any given day, is two thirds to 80% of the market value of crypto. And then there’s everything else. Or some people say Bitcoin and Ethereum and everything else.”
He was blunt in his assessment that the other “10,000 or 15,000” which are projects with no fundamentals which only profit from sentiment shifts. “I’ve never seen a field that’s so much wrapped up in sentiment and not so much about fundamentals. And these 10,000 to 15,000 projects, many of them will not survive. They’re like venture capital investments. They’re not going to survive.”
Gensler also highlighted that there’s a huge number of “small pump and dump schemes”. Specifically referencing high-profile enforcement actions, Gensler stated: “We’ve lived through a few years where, you know, they became notorious, but they’re in jail. The Sam Bankman-Fried, the CZ’s and Do Kwon’s where tens of billions of dollars were lost by investors.”
Gensler was also asked about the shift from his time at MIT—where he studied digital assets—to his enforcement-heavy approach at the SEC. He addressed the public perception that he would be a “champion” of crypto by noting the difference between academic inquiry and regulatory responsibilities. “When you’re in academia […] you can study something and observe it […] But then when you’re in this job […] building upon my predecessor[…] It’s a field rife with challenges and noncompliance with the securities laws.”
At press time, Bitcoin traded at $93,253.
