U.S. Securities and Exchange Commission Chairman Gary Gensler said on Wednesday that federal securities regulators may still take enforcement action against cryptocurrency exchanges even if they disclose the risks of their products to retail investors.
On CNBC interviewGensler said that crypto exchanges that disclose information are not immune to potential lawsuits from regulators if they are “manipulating the market,” and that companies are not protected from lawsuits if they publish “misleading” information that leads traders to put money into products they otherwise would not invest in.
“Disclosure doesn’t necessarily protect bad actors,” Gensler said. “It’s not just about disclosure.”
Gensler also said Wednesday that most crypto companies still do not disclose any information at all. In an interview with CNBC, he said crypto exchanges have long operated in ways that would never be tolerated on traditional financial market trading platforms.
The SEC has been cracking down on the digital asset industry in recent years, especially since the collapse of crypto exchange FTX. The SEC has sued Kraken and Binance, and also filed a civil lawsuit against Coinbase, the largest crypto exchange in the U.S. by daily trading volume.
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