SEC Chairman Gensler compares crypto with "the hucksters, the fraudsters, the scam artists" of the 1920s that helped trigger the Great Depression

Yesterday, Gary Gensler, the chairman of the Securities and Exchange Commission (SEC) sat down with the Wall Street Journal to discuss why the SEC is working to reign in crypto. Here are some excerpts of his comments:

"We've seen this story before. It's called the 1920s. The hucksters, the fraudsters, the scam artists, the bankruptcies were preying upon the public's interest in a new form, investing in the stock market after World War I. And it ended with, of course, the Great Depression of the 1929 crash and so forth. And as a bit of a student of financial history, a lot of what we see in crypto has some of these same infirmities. You're not getting the full, fair and truthful disclosure."

"I would really contend probably the only successful path forward is to ensure the public gets their proper disclosure and that the platforms in the middle of the market are not so conflicted, so bundled up that they're just there to take money out of the pockets of the investing public. That's what we saw in the 1920s, and look at how many hucksters and fraudsters we've already seen in this field."

​"You've got platforms against which you're trading. They're both a hedge fund trading against you, they might be borrowing against your assets. They might not even be keeping your assets. We allege in Binance that you may have thought that your funds or crypto were custodied here in the US, and not so clear that they were. We allege in Binance that it had a great amount of deception and concealment about where your funds and crypto were, that they were co-mingling the house funds with your funds. I would suggest you'd want to be very careful. And if somebody's not giving you disclosure, you should ask yourself, why aren't they willing to give me the disclosures I deserve and under the law I'm supposed to get? Why isn't that crypto trading platform properly separating my funds and putting them remote from the bankruptcy?"

"The risk is actually that somehow crypto undermines that traditional system of trust, that when you use a brokerage app, you use a robo-advisor or even you pick up the phone and you talk to some humans at a bank or a broker-dealer, you trust in that system. The greater risk is that somehow the crypto field undermines that trust in our traditional system."

See the previous report on the recently filed lawsuits against crypto giants Binance and Coinbase here: Biggest Federal Crackdown on Crypto to Date: SEC files lawsuits against two largest crypto exchanges-- threatens another collapse in bitcoin prices - PROTECT PEND OREILLE

The complete interview is available here:  ​SEC Chair Gary Gensler on His Crypto Crackdown - The Journal. - WSJ Podcasts