SEC Chairman: Regulators should be prepared to prosecute bad actors in crypto and other fields

Federal financial regulators should be “prepared to prosecute” bad actors in cryptocurrencies and other emerging technology sectors, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said at the 2021 FINRA Annual Meeting on Thursday.

Gary Gensler said earlier today that crypto exchanges need more regulation and the public would benefit from more investor protection from the SEC on crypto exchanges.

Gensler told FINRA conference attendees that “as we continue to keep pace with these developments, the SEC and FINRA should be prepared to bring cases involving issues such as crypto, cyber, and financial technology.”

In his brief speech, he stressed investor protection.

“We need to do everything we can to ensure bad actors don’t squander the savings of working families and to enforce these rules aggressively and consistently,” Gensler said.

Federal agencies are proposing upgrades to their cryptocurrency regulatory efforts, with the Internal Revenue Service requiring businesses to disclose high-value transactions and calling for a review of crypto-friendly bank policies.

Gensler said regulators should be prepared to go after deceptive private equity funds, accounting fraud, insider trading and a host of other potential regulatory pitfalls that ripple across capital markets.

His comments are likely to reinforce the view that protecting investors is a top priority for the SEC during a Biden administration, especially when it comes to crypto.

Perhaps more telling is the SEC’s warning to mutual fund investors trading bitcoin futures on May 11. The memo, while not alleging any fraud, highlighted bitcoin’s massive volatility and directed SEC staff to consider suspicious activity in the space.