SEC Chair Issues Stern Warning to Bad Actors in Crypto

The chairman’s statements are promising in regards to protecting inexperienced crypto market investors.

The Warning

Gary Gensler, the chairman of the Securities and Exchange Commission (SEC) of the United States, issued a stern warning on Thursday that the financial regulator will not hesitate to take action against bad actors in crypto and other emerging technologies. 

This is a reassuring stance by the regulator in stemming out fraudulent and non-compliant players in the market. An action that is necessary to protect the public from falling prey to a relatively new industry. 

2021 Annual FINRA Conference 

Gary Gensler, a former professor at MIT and the current chairman of the SEC, spoke at the FINRA (Financial Industry Regulatory Authority) Conference, and took the opportunity to announce his priority in stemming out ‘bad actors’ under his watch. Investors’ protection is the SEC’s paramount concern and his speech outlined the SEC’s three-part mission to protect investors, facilitate capital formation, and what links the two: fair, orderly, and efficient markets. 

The crypto market has seen its fair share of activities, and this includes activities that can be deemed as outright fraud. This industry is a relatively young one and the innovation and its promise has attracted many, but unfortunately, not all are sophisticated investors who can identify legitimate businesses in the cryptosphere.

Weeding Out the ‘Bad Actors’

Gary Gensler, in an interview with CNBC on the 7th of May, continued to be consistent in addressing his concerns revolving around investor’s protection, particularly in the crypto market. In the past, numerous events in the crypto space had many unsuspecting victims losing their life savings to scams and other clandestine activities. 

  The exponential rise of investment scams involving cryptocurrency is a result of exuberance in the market. The general public, particularly those that were caught in the frenzy of the bull market that the crypto market is currently experiencing, are easy targets. These are the people that must be protected by the regulators, as they are the most likely to not recognize a scam. 

Cryptocurrency Scam is A Global Concern

The issues raised by Gary Gensler are not solely confined to the United States. The world is constantly inundated with headlines of money laundering, dubious investment schemes and other unlawful activities finding its refuge in a young and emerging market, the crypto space. 

Examples

6th July, 2020 – VaultAge Solutions Chief Executive, Willie Breedt goes into hiding to avoid cryptocurrency investors. 

31st July, 2020 – China police arrested 109 people for their involvement in the PlusToken fraud.  

7th December, 2020 – Alexander Vinnik, the founder and CEO of BTC-e was sentenced to 5 years on money laundering charges. 

23rd April, 2021 – Faruk Fatih Ozer, the founder of Thodex, a cryptocurrency exchange in Turkey, fled with $2 billion of investors’ assets. 

The above are just a few instances from the thousands of dubious and unlawful activities taking place within the crypto industry. Cryptocurrency, as it gains a firmer footing as a viable asset class, will be faced with more challenges in the future. This ‘weeding’ process is inevitable and regulators have to step up to create a safe environment for investors.

Source : bsc.news