SEC head compared the crypto community to the "hustlers and con artists" of the 1920s

SEC head compared the crypto community to the "hustlers and con artists" of the 1920s
SEC head Gary Gensler compared the crypto community to "hustlers and swindlers" in the U.S. stock market during the "Roaring Twenties
Gary Gensler said that securities laws helped defeat financial fraud in the 1930s and will help the cryptocurrency industry today

Securities and Exchange Commission (SEC) head Gary Gensler compared the cryptocurrency industry to the American stock market of the 1920s, full of "hustlers and swindlers."

Speaking at the Piper Sandler Global Exchange & Fintech Conference on June 8, Gensler said that the passage of securities laws in 1933 and 1934 in the United States helped curb stock market fraud. These same laws will also help "clean up" the cryptocurrency market.

"With widespread non-compliance with the law, it's honestly not surprising that we're seeing a lot of problems in these markets. Merchants, crooks, con artists, pyramid schemes. And the public was lining up in bankruptcy court," said the SEC chairman.

The solution, according to Gensler, is for cryptocurrency issuers and trading platforms to comply with securities laws. Today's "cryptocurrency securities markets" should also benefit from these laws because they are no "less deserving of the protection" of these laws.

The SEC argues that most cryptocurrencies fall under the definition of securities. And even if tokens have additional utility (which the cryptocurrency community cites in denying the regulator's position), that doesn't take "cryptocurrency security" out of the definition of an investment contract, Gensler said.

Two days earlier, speaking on CNBC on June 6, Gensler said that cryptocurrencies are essentially unnecessary. In his opinion, digital fiat currencies-the dollar, the euro, and others-are sufficient.

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