SEC’s Gensler says crypto 'rife with abuses and fraud' as bitcoin surges to new all-time record
SEC Chair Gary Gensler offered new warnings about cryptocurrencies as bitcoin (BTC-USD) surged to a new all-time high Friday, saying in an interview with Yahoo Finance that "the whole field is rife with abuses and fraud."
Investors, he added, should be aware that bitcoin is a "highly speculative, volatile underlying asset."
Read more: Is this a good time to invest in bitcoin?
His comments came minutes after the world's largest cryptocurrency reached another record high, climbing above $69,000 on Friday. Earlier this week it exceeded a previous high last set during a 2021 boom, reinforcing a remarkable comeback following a 2022 crash that created huge losses for investors.
The new frenzy is being driven by demand from a series of spot bitcoin exchange-traded funds that started trading in January after receiving approvals from the SEC.
Gensler voted in favor of those ETFs. On Friday he said of that decision, "I thought it was the most straightforward path forward."
Many money managers are now also seeking approval from the SEC to launch spot ethereum ETFs tied to the world's second-largest cryptocurrency (ETH-USD).
Gensler on Friday declined to say whether he would approve those applications and instead spoke more broadly about the wider crypto field, saying it "has challenges" and is "rife with abuses and fraud."
He singled out intermediaries that pool the digital assets of investors without giving investors "the proper disclosures," saying, "I think that puts the investing public at risk."
The SEC is suing Coinbase (COIN) and Binance, two big cryptocurrency exchanges, but Gensler didn't mention any specific companies by name.
Gensler also spoke about long-awaited climate-risk disclosure rules the SEC approved earlier this week. The rules require companies to disclose climate emissions that pose material risks to their business.
Large companies will be required to disclose the direct emissions from their operations and energy use, known as Scope 1 and Scope 2 emissions.
The SEC notably pared back the final ruling, trimming a provision that would have required companies to report their Scope 3 impact — that is, indirect emissions from suppliers and consumers.
The Scope 3 standard faced considerable resistance from conservatives and business groups who complained about high compliance costs and overreach, while climate-focused investors and lawmakers pushed for the SEC to include Scope 3 to help crack down on companies downplaying their full environmental impact.
Republicans and Democrats alike have criticized the rule, with Republican House Financial Services Committee Chair Patrick McHenry and Senate Banking Committee ranking member Senator Tim Scott pledging to try to block it. Democrats like Senator Elizabeth Warren say the rule doesn’t go far enough.
When asked why the SEC opted to drop Scope 3, Gensler said, "At the proposal stage, this area wasn't as developed" and "fewer companies right now, fewer issuers are making such information available." So "we chose at this time not to have a requirement."
When asked whether the SEC could add it back, Gensler said "it will be for future commissions to consider or whether to make adjustments to this again."
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