SEC Chair Gensler Calls for More Regulatory Sunlight in Cryptocurrency Sector at Law Conference

At a recent gathering at the Columbia Law School Conference, Gary Gensler, the chair of the U.S. Securities and Exchange Commission, addressed the assembly on the topic of the digital currency landscape. His discourse highlighted the “benefits of mandatory disclosure,” with Gensler humorously alleging that certain “participants in crypto securities markets that seek to avoid these registration requirements.”

Gensler: ‘Crypto Markets Could Use a Little Disinfectant’

Gary Gensler continues to express concerns over the cryptocurrency sector, describing it as fraught with fraud and malpractice in a recent interview. At the Columbia Law School Conference in Washington D.C., he elaborated on the advantages of obligatory disclosure and the importance of securities regulation. His remarks paid tribute to Jack Coffee, a venerated figure in securities law scholarship and policy, who authored “Market Failure and the Economic Case for a Mandatory Disclosure System.”
Gensler highlighted that following Coffee’s publication, at the time, there was a push for voluntary disclosure. Yet, the head of the SEC pointed out the flaw in this approach: companies unwilling to share less-than-favorable information would often choose silence over transparency. Gensler emphasized his agreement with Coffee, noting “the benefits from investors having access to disclosure required by laws and rules are numerous.”
The SEC chair subsequently shifted his address towards the cryptocurrency sector, following a reference to a 1913 statement by U.S. Supreme Court Justice Louis Brandeis. “Sunlight is said to be the best of disinfectants,” Brandeis said at the time. Gensler explained that after 40 years since Coffee’s paper, there are “those who would like to whittle away at the SEC’s disclosure regime.” He added that “some voices today are calling for further expanding the exemptions to our core 1933 and 1934 Act rules requiring registration of public offerings and ongoing disclosures.”
“There are participants in crypto securities markets that seek to avoid these registration requirements,” Gensler remarked. “No registration means no mandatory disclosure. Many would agree that the crypto markets could use a little disinfectant.”
The SEC head effectively concluded his remarks with a pointed critique of the cryptocurrency markets, asserting that Jack Coffee’s perspectives “have stood the test of time.”
What do you think about Gary Gensler’s statements from his recent speech? Share your thoughts and opinions about this subject in the comments section below.