Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), has slammed the cryptocurrency space for not providing enough disclosure to investors compared to the traditional financial sector. In an interview with CNBC, Gensler said that most cryptocurrencies are considered securities and must comply with the relevant laws.

Gensler's comments come just days after Robinhood's cryptocurrency unit received a Wells Notice of possible enforcement action from the U.S. Securities and Exchange Commission (SEC). The regulator has already sent similar notices to Coinbase and Uniswap, a decentralized finance (DeFi) cryptocurrency. The cryptocurrency market has come under increasing regulatory scrutiny in recent years. In an interview, Gensler addressed the issue and offered his insights on the intersection of cryptocurrencies and traditional stock markets.

Extensive Oversight

Regarding recent developments, Gensler insisted that the SEC has a responsibility to uphold the legal standards of the financial industry. He emphasized that ongoing litigation and enforcement efforts are designed to safeguard investor interests.

"But taking a step back, in the crypto asset space, without prejudging any of them, many of these tokens are securities under the interpretation of the U.S. Supreme Court. Therefore, we follow that law. And you, the investors, are not getting the necessary or required disclosures about these assets," Gensler told CNBC.

Gensler outlined the broad jurisdiction of the SEC, which oversees the $110 trillion capital markets. While the stock market makes up a large portion of that, Gensler emphasized that the cryptocurrency market, while smaller, is disproportionately plagued by scams and non-compliance with securities laws.

At a time when cryptocurrency-related fraud is a growing concern, Gensler emphasized the lack of compliance regulation in the cryptocurrency space. He emphasized the critical role of disclosure in traditional securities markets, highlighting the gap in transparency between crypto assets and traditional securities.

Gensler reiterates cryptocurrency regulation

In response to a question about the much-hyped focus on cryptocurrencies, Gensler emphasized the role of the media in leading the discussion. Despite the attention on cryptocurrencies, Gensler said he would work on broader market issues, including ensuring investor protection and market integrity. He stood by his consistent position that most cryptocurrencies are securities.

Most recently, Robinhood CEO Vlad Tenev took the SEC to task for its enforcement actions, stating the following about cryptocurrencies over the past three years: "Over the past three years, we've reached a state of regulatory onslaught that has been harmful to U.S. companies and consumers. The SEC's continued assault on cryptocurrencies, coupled with recent proposed rules, such as those related to predictive data analytics, mark yet another attempt by the administrative state to stifle innovation inappropriate behavior."