Gary Gensler says 'we don't need more digital currency' after Coinbase, Binance lawsuits

Quick Take

  • SEC Chair Gensler said there is no need for more digital currency.
  • He added that the U.S. dollar, euro and yen are all already digital.

U.S. Securities and Exchange Commission Chair Gary Gensler took to live television on Tuesday to say there is no need for more digital currencies.

“We don’t need more digital currency. We already have digital currency. It’s called the U.S. dollar. It’s called euro. It’s called the yen. They’re all digital now,” said Gensler on CNBC's Squawk Box.

Gensler's statements come on the heels of the SEC announcing lawsuits against the U.S.-based Coinbase and the world's largest cryptocurrency exchange, Binance. At one point during the broadcast Gensler directly addressed the investing public.

“These trading platforms, they call themselves exchanges, are co-mingling a number of functions," he said. "In traditional finance; we don’t see the New York Stock Exchange also operating a hedge fund, making markets, and as we alleged in Binance, having a sister organization flooding the platform with transactions called ‘wash trading.’”

The SEC's allegations against Binance are reminiscent of the accusations made against the failed crypto exchange FTX and its sister trading firm Alameda Research, which included the commingling of company and customer assets, misuse of customer funds and possible market manipulation of native tokens. 

Gensler said the lawsuits against Coinbase and Binance were a long time coming and took awhile to bring forth because of the amount of work involved. "It takes time. We do things by the book," he said. "It's a lot of gumshoe, walking-the-beat investigation to build a case like what you've seen alleged in a 136-page complaint."

Coinbase and Binance have been locking horns with US regulators for some time now. Gensler said he and his colleagues have tried to talk to the platforms in an effort to bring them into compliance.

“We’ve had discussions with literally dozens of crypto incumbents (including Coinbase and Binance) and what we find is, this is a field that’s built, the whole business model is built on non-compliance with the US securities laws,” he said. “We’re asking them to come into compliance and they’re going a bit of ‘catch us if you can.'”

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