SEC’s Gensler says more investor protection is needed after FTX fiasco News ▸ US ▸ FTX ▸ Bitcoin ▸ Regulation
SEC’s Gensler says more investor protection is needed after FTX fiasco
SEC Chairman Gary Gensler said the crypto industry needs better investor protection and investor education to avoid another FTX scenario.
1 min read
Updated: Oct. 9, 2023 at 4:55 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
SEC Chairman Gary Gensler addressed the ongoing market crisis caused by the FTX fallout during an interview on CNBC’s Squawk Box.
Gensler, who has been pushing for increased regulation and targeting various crypto companies for fraud in the U.S., said the space needed better regulation and better enforcement.
He explained that U.S. laws are clear but that the industry was “significantly non-compliant.” The SEC has spearheaded dozens of enforcement actions against various crypto companies operating in the U.S., targeting influencers promoting unregistered cryptocurrencies and the companies that issued them.
However, Gensler believes that the best road ahead is still working hand-in-hand with cryptocurrency exchanges to get them registered as this is the best way to protect investors, he told CNBC’s Andrew Sorkin. He added:
“The runway is running out. Investors in the U.S. and around the world are getting hurt.”
Gensler also addressed the meeting he had with FTX’s Sam Bankman-Fried in March this year. When asked whether he was hoodwinked by the exchange, Gensler said that he met with various industry representatives throughout the year and shared the same message with everyone.
“We’ve sent the same message to the public and the same message to them — that non-compliance is not going to work.”
Do you feel like you were hoodwinked? @andrewrsorkin asks @GaryGensler: pic.twitter.com/wSQZ5sgioP
— Squawk Box (@SquawkCNBC) November 10, 2022
Gensler said that the toxic combination threatening the industry is the fact that big players “co-mingle” and work together against customers.
“This is not like the New York Stock Exchange or Nasdaq. These platforms co-mingle. It’s a toxic combination where they take people’s money, they borrow against it, not much disclosure, and then they trade against their customers.”
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Author 
Andjela Radmilac
Armed with a classical education and an eye for news, Andjela dove head deep into the crypto industry in 2018 after spending years covering politics.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
FTX Token
$2.37957
FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.