U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said Wednesday that federal securities agents can continue to take enforcement actions against cryptocurrency exchanges even if the platforms disclose the risks of their products to retail investors.
In a CNBC interview, Gensler said that public cryptocurrency exchanges would not be able to avoid being sued by regulators if they “manipulate the markets.” He also said the company is not protected from lawsuits if it discloses “misleading” information that entices traders to pour money into products they would not invest in.
“Disclosure does not necessarily protect bad actors,” Gensler said. “You can’t just make it public.”
Gensler also said Wednesday that most cryptocurrency companies are still not making any disclosures at all. He said in a CNBC interview that cryptocurrency exchanges have long operated in a way that trading platforms in traditional financial markets were never allowed to operate.
The SEC has been cracking down on the digital asset industry in recent years, especially after the collapse of cryptocurrency exchange FTX. The organization has sued Kraken and Binance, and is continuing a civil lawsuit against Coinbase, the largest U.S. cryptocurrency exchange by daily trading volume.
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About the author
Elizabeth Napolitano is a data reporter covering business and technology news with a focus on cryptocurrency. Before she joined The Block, Elizabeth reported on BigTech, AI, crypto, and video games for CBS Moneywatch. As a CoinDesk reporter, she covered DeFi, NFTs, and US courts. She received a master’s degree in journalism from CUNY. X: Follow her at @LizKNapolitano.