SEC Chair Gary Gensler Takes Another Swipe at the Crypto Sector, Says Digital Asset Firms Avoid Disclosure Laws

Gary Gensler believes that some crypto firms evade mandatory disclosure requirements.

The chairman of the U.S. Securities and Exchange Commission (SEC) recently addressed the Columbia Law School Conference and explained the importance of mandatory disclosure requirements for companies.

"The benefits of investors having access to disclosures required by law and regulations are numerous. First, disclosure promotes more efficient markets. It promotes better price discovery. Providing more information leads to prices that more accurately reflect a company's prospects.

Second, such prices provide valuable signals, helping capital flow to its most productive use, and thus promoting capital formation.

Third, disclosure promotes trust in markets and the companies that are raising money from the public."

Gensler also argues that some participants in the "crypto securities markets" seek to avoid public offering registration requirements.

"No registration means no mandatory disclosure. Many would agree that the crypto markets could use a little disinfectant."

The SEC chairman made headlines earlier this month when he refused to answer when asked whether the top smart contract platform Ethereum (ETH) counted as a security or a commodity.

"Any one of these crypto tokens is about the facts and circumstances as to whether the investing public is anticipating a profit based on the efforts of others, but we do have filings in front of us. I'm not going to comment."