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Gary Gensler, the Chairman of the US Securities and Exchange Commission (SEC), expressed deep concerns over the prevalence of fraud within the crypto market. 
In an interview with Bloomberg on Thursday, Gensler pointed out that the crypto market is plagued with fraudulent schemes and deceitful actors, overshadowing the presence of genuine participants. 
Highlighting the challenges faced by investors, Gensler emphasized that the speculative nature of the crypto industry is not the sole issue. 
He stressed that crypto investors should not assume they are receiving the same level of protection as provided by securities laws, even though some cryptocurrencies may fall under their purview. 
Gensler raised alarm over the lack of full, fair, and truthful disclosures provided to US investors, with platforms and intermediaries engaging in practices that would not be acceptable on traditional stock exchanges like the New York Stock Exchange or Nasdaq. 
This concern by the SEC Chairman comes in the aftermath of a US court ruling in favor of Ripple during the ongoing lawsuit brought by the SEC. 
The court ruled that selling XRP on exchanges does not constitute an investment contract, but it recognized XRP as a security when sold to institutional investors based on the Howey Test conditions. 
In response to recent collapses of prominent crypto companies, the SEC has intensified its scrutiny of the crypto industry. 
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Lawsuits have been filed against major exchanges like Binance and Coinbase, as well as enforcement actions taken against Kraken, Bittrex, and Nexo. 
The increased regulatory pressure has led some crypto companies to consider relocating to more favorable jurisdictions, with Coinbase establishing a presence in Bermuda and Bittrex ceasing operations in the US. 
Moreover, the regulatory uncertainty in the US has driven away blockchain developers, as evidenced by a decline in the country’s share of blockchain developers from 40% in 2017 to 29% in 2020, according to a report by Electric Capital. 
This trend suggests that the stringent regulatory environment may be discouraging crypto businesses and talent from operating in the United States. 
In conclusion, Chairman Gensler’s apprehensions about fraud in the crypto market reflect the SEC’s growing concerns. 
The recent legal developments and regulatory actions indicate a shift towards increased scrutiny of the crypto industry, leading some companies to consider more hospitable jurisdictions. 
The impact of these regulatory moves may have significant implications for the future of crypto operations in the United States. 
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SEC Chairman Gary Gensler Raises Alarm Over Widespread Fraud in Crypto Market

Crypto Intelligence

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