SEC Chair Gary Gensler Sounds Alarm on Bitcoin

SEC Chair Gary Gensler has voiced renewed concerns about the cryptocurrency market as Bitcoin surged to a new all-time high, reaching above $69,000 on Friday. The SEC boss maintained that the whole field is rife with abuses and fraud.”

Crypto and Bitcoin Abuses and Fraud

In an interview with Yahoo Finance, Gensler cautioned investors about the rampant abuses and fraud prevalent in the crypto space. While highlighting the risks associated with crypto investment, Gensler described Bitcoin as a “highly speculative, volatile underlying asset,” and urged investors to exercise caution.

Although Gensler voted in favor of the approval of spot bitcoin exchange-traded funds (ETFs), he remains concerned about the general crypto space.  The SEC chair’s remarks come amid a surge in demand for spot bitcoin exchange-traded funds which have garnered approval from stakeholders and contributed to Bitcoin’s recent price rally.

SEC’s Stance on Cryptocurrency ETFs

Curiously, despite the increasing attention towards cryptocurrencies, Gensler opted to remain mute on the approval of spot Ethereum ETFs, signaling a prudent stance regarding the expansion of ETF offerings within the crypto market.

It is still uncertain whether his lack of response stemmed from recent remarks made by the head of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, cautioning about a possible SEC ruling that might designate Ether as a security.

Since Bitcoin met the ETF application requirements, the cryptocurrency market has been buzzing with speculation regarding the potential for an Ethereum ETF.

SEC’s Climate-Risk Disclosure Rules

Nevertheless, he discussed the recent approval by the SEC of regulations mandating companies to disclose climate-related risks affecting their operations. This mandates major corporations to divulge their Scope 1 and Scope 2 emissions, encompassing direct emissions from their operations and energy usage.

However, the SEC notably tempered the ruling by omitting the necessity for companies to report their Scope 3 impact, which pertains to indirect emissions linked to suppliers and consumers. Gensler clarified that this omission was due to the underdeveloped nature of this aspect during the proposal phase and the limited data availability from companies.

While recognizing the potential advantages of including Scope 3 emissions for investors and lawmakers focusing on climate issues, Gensler explained that the SEC chose not to enforce this requirement at present.