The cryptocurrency market is rife with abuse and its negative impacts on investor confidence could potentially have far-reaching consequences, according to Securities and Exchange Commission Chair Gary Gensler.
"It's an area that can hurt investors, but it can also hurt the broader economy because it can hurt investor confidence," Gensler said Sept. 13 during an event hosted by nonprofit watchdog Better Markets marking the 15th anniversary of the Lehman Brothers collapse.
Gensler, who has often criticized the crypto space during his tenure as SEC chair, said that he's "never seen a field so rife misconduct and people trying to run outside of the law when they're actually under the law."
When asked if new laws and regulations are needed to oversee the space, Gensler said there are already sufficient rules in place under laws governing securities, commodities, money laundering and sanctions.
Crypto stakeholders and proponents on Capitol Hill have a different viewpoint and say regulatory clarity is needed. Several bills have been introduced and advanced this year aimed at addressing the issue.
In prior public statements, Gensler has said that the SEC has the authority to regulate the crypto industry because of the nearly 10,000 tokens in the crypto market, the vast majority are securities, though the largest token, bitcoin, has the properties of a commodity.
In closing the crypto-focused portion of the discussion, Gensler did not respond to a comment from the moderator noting that the SEC has lost some crypto-related court cases recently. Of note, a federal appeals court last month ruled in favor of Grayscale Investments in its case against the SEC over the regulator's denial of an application to convert the Grayscale Bitcoin Trust to a spot bitcoin ETF.