Gensler mentioned that the agency initiated over 780 enforcement actions in 2023 leading to $5 billion in judgments and orders. The agency also distributed $930 million being distributed to investors.
Gary Gensler, Chair of the US Securities and Exchange Commission (SEC), discussed the regulatory body’s enforcement efforts during his speech at the 2023 Securities Enforcement Forum. He highlighted that these actions resulted in judgments and orders amounting to $5 billion.
Notably, Gensler’s remarks about the cryptocurrency market stirred discussion within the crypto community on social media. He stated:
“Don’t get me started on crypto. I won’t even name all the individuals we’ve charged in this highly noncompliant field.”
In the context of the SEC’s economic perspective on enforcement actions, Gensler mentioned that the agency initiated over 780 enforcement actions in 2023. Of these more than 500 were standalone cases. These actions ultimately led to $5 billion in judgments and orders, with $930 million being distributed to investors who had suffered losses.
Gensler further disclosed that the SEC had initiated legal action against 40 companies for violating diverse rules and regulations since December 2021, resulting in fines exceeding $1.5 billion. He also pointed out that the SEC had resolved charges related to recordkeeping with 23 companies in the past fiscal year, marking a significant number of settlements in this category.
Cryptocurrencies Fall Under Securities Bracket
During his address, the SEC Chair reiterated his previous stance on cryptocurrencies, asserting that a substantial portion of the crypto market should be classified as securities and therefore subject to the same regulatory framework. He elaborated on the extensive scope of the term “security,” emphasizing the notion of an investment contract and how it closely aligns with many cryptocurrency assets. Gensler contended that the majority of crypto assets would meet the criteria for investment contracts, thereby making them subject to securities regulations.
Furthermore, Gensler drew parallels between the current state of the cryptocurrency ecosystem and the financial landscape of the 1920s, a time when securities regulations were not in the market. He highlighted that the crypto sector faces similar challenges to those experienced before introducing comprehensive regulations resulting in numerous fraudulent activities, scams, and financial insolvencies. Gensler argued that these issues underscore the need for more stringent regulatory measures.
“Without prejudging any one asset, the vast majority of crypto assets likely meet the investment contract test, making them subject to the securities laws,” noted Gensler.
Gensler’s critique of the cryptocurrency market has been consistent over the years, echoing his well-established position. Nevertheless, numerous voices, including members of Congress, the cryptocurrency community, and key US-based businesses, have urged Gensler to provide clearer and more comprehensive guidance regarding cryptocurrency regulations.