- Gary Gensler claimed that most altcoin projects with no fundamentals will fail.
- The outgoing chair was proud of his legacy and called for appropriate disclosures in the space.
In a recent Bloomberg interview, Gary Gensler stated,
‘This field is Bitcoin, Ethereum and everything else… These 10K-15K crypto projects, many of them will not survive. They’re like venture capital investment and a fair number of small pump-and-dump schemes’
Will the altcoin sector fail?
Gensler noted that markets are moved by fundamentals and sentiment. However, most of the 10K-15K altcoin projects depend only on sentiment and may not survive. He added that the sector has several bad actors, citing Do Kwon, Sam Bankman-Fried, and Binance’s founder, CZ.
While this may be true, there are also many projects with solid product-market fit (PMF), like Solana’s Hivemapper (Google Maps’ equivalent) and cheaper cross-border transactions through Tron and Ton blockchains.
However, during Gensler’s leadership, there has been no regulatory clarity on the status of these networks.
Instead, the regulator opted for an enforcement action approach that insiders claimed stifled innovations and even fueled Donald Trump’s presidential victory after he embraced the industry.
At the time of writing, lawsuits are ongoing against Coinbase, Binance, Ripple Labs, and other crypto firms, including Uniswap, which was notified of a potential indictment.
As a result, chair Gensler is deemed as an ‘enemy’ by most of the crypto community. However, he was proud of his legacy and the enforcement actions, stating that the sector is ‘built on non-compliance.’ He stated,
‘It’s a field (crypto sector) built on non-compliance, and I’m proud of what we’ve done. There’s still a lot to be done, especially, on these 10K-15K alternative coins and the intermediaries themselves.”
Gensler added that the sector is the most volatile segment, but has no proper disclosures.
That said, the outgoing chair will be replaced by pro-crypto Paul Atkins in about two weeks. It remains to be seen how the new regime will offer more regulatory clarity in the sector.
