Renewed Warnings on Crypto Risks
Former US Securities and Exchange Commission Chair Gary Gensler has reiterated his warnings to investors regarding the inherent risks associated with cryptocurrencies, describing the majority of the market as "highly speculative" in a recent interview with Bloomberg. He differentiated Bitcoin (BTC) as being comparatively closer to a commodity, while emphasizing that most other tokens do not offer "a dividend" or "usual returns."
Gensler characterized the current market conditions as a validation of the concerns he expressed during his tenure, noting that the global public's interest in cryptocurrencies does not necessarily correlate with fundamental value. He urged the investing public to be aware of the risks, stating, "All the thousands of other tokens, not the stablecoins that are backed by US dollars, but all the thousands of other tokens, you have to ask yourself, what are the fundamentals? What’s underlying it… The investing public just needs to be aware of those risks."
Gensler's Record and Industry Reactions
During his leadership of the SEC from April 2021 to January 2025, Gensler oversaw a robust enforcement strategy that included legal actions against major cryptocurrency intermediaries. A key aspect of this strategy was the SEC's stance that many crypto tokens qualify as unregistered securities. The cryptocurrency industry faced significant backlash from these high-profile actions, including lawsuits against exchanges and staking programs, and the assertion that most token issuers had violated registration rules.
Under Gensler's leadership, the SEC sued Coinbase for operating as an unregistered exchange, broker, and clearing agency, and for offering an unregistered staking-as-a-service program. Additionally, Kraken was compelled to cease its US staking program and pay a $30 million penalty.
The Politicization of Cryptocurrency
When questioned by the Bloomberg interviewer about the politicization of crypto, including references to the Trump family's involvement, the former SEC chair dismissed this framing. He argued that the issue is less about partisan politics and more about ensuring fairness in capital markets and establishing "commonsense rules of the road."
Gensler explained that the fairness underpinning US capital markets means that when individuals buy or sell stocks or bonds, they expect to receive adequate information and be treated similarly to larger investors.
ETFs and the Trend Towards Centralization
Regarding exchange-traded funds (ETFs), Gensler observed that finance, throughout history, has consistently moved "toward centralization." He noted that it is therefore unsurprising that an ecosystem initially designed to be decentralized has become "more integrated and more centralized."
He pointed out that investors already have the ability to gain exposure to gold and silver through ETFs. Furthermore, during his tenure, the first US Bitcoin futures ETFs were approved, which further integrated aspects of the crypto market with traditional financial systems.
Gensler's latest remarks reinforce his consistent stance: Bitcoin occupies a distinct category, while he views most other tokens as speculative and lacking fundamental underpinnings. Even after leaving office, his perspective is likely to influence legal proceedings, compliance strategies, and investment decisions concerning Bitcoin's commodity-like status versus the ongoing regulatory caution surrounding altcoins.