Former SEC Chair Gary Gensler has cautioned investors about the speculative and volatile nature of cryptocurrencies, even as the asset class experiences increasing acceptance in mainstream finance and the Trump White House. In a Bloomberg interview on December 2, 2025, Gensler highlighted that the vast majority of the 10,000 to 15,000 crypto projects lack comprehensive disclosures, thereby exposing retail investors to significant risks. This warning comes at a time when cryptocurrencies are becoming more integrated into U.S. capital markets, with President Trump's supportive stance on Bitcoin contributing to a more positive market sentiment.
Gensler's Risk Assessment
Gensler characterized the cryptocurrency space as being permeated by bad actors, fraud, and trading driven by sentiment rather than underlying fundamentals. He likened many crypto projects to high-risk venture capital investments that are unlikely to survive, pointing to billions of dollars lost in past market collapses. Gensler noted that a significant portion of the public, estimated at 7-9%, invests in crypto without adequate investor protections, and he advocated for the establishment of consistent regulations for brokers and advisors.
The former regulator also drew attention to issues such as stalled oracle data and pricing errors that have occurred during system outages, drawing parallels to recent disruptions at the Chicago Mercantile Exchange which are currently under scrutiny. While no on-chain funds were lost during these specific crypto events, traders experienced substantial liquidations. Gensler reiterated his belief in the potential of markets but stressed the necessity of implementing protections to prevent manipulation.
Regulatory Outlook Under Trump
President Trump's reelection and upcoming inauguration in January 2025 suggest a potential shift in regulatory approaches, with promises to elevate America to the status of a "Bitcoin superpower." Despite this, Gensler emphasized that substantial work remains in ensuring adequate disclosures for altcoins, distinguishing them from Bitcoin, which is generally treated as a commodity. Throughout his tenure, Gensler's SEC pursued enforcement actions against non-compliant platforms with the objective of encouraging behavioral change within the industry.
Concurrently, House Republicans have launched a congressional investigation into the Securities and Exchange Commission (SEC). This probe was initiated following the discovery that text messages from former Chair Gary Gensler were deleted during his time leading the agency. The central accusation revolves around a perceived double standard: lawmakers contend that Gensler has been stringent with Wall Street firms regarding record-keeping rules, yet his own agency allegedly mishandled its IT policy, leading to the loss of internal communications. Compounding the issue, some of these deleted records were reportedly connected to crypto enforcement cases, potentially leaving gaps in crucial regulatory history. This situation further fuels existing concerns about the SEC's technical capabilities and its commitment to complete transparency.