Gensler Warns Investors of Crypto Risks Amid Mainstream Acceptance

Source: DefiPlanet Original Title: Gensler Warns Investors of Crypto Risks Amid Mainstream Acceptance Original Link: https://defi-planet.com/2025/12/gensler-warns-investors-of-crypto-risks-amid-mainstream-acceptance/

Quick Breakdown

• Former SEC Chair Gary Gensler warns investors about crypto’s speculative volatility despite mainstream gains and the Trump White House’s acceptance.
• Gensler highlights Bitcoin as unique amid thousands of tokens lacking fundamentals, urging caution in the high-risk crypto space.
• In a Bloomberg interview, former SEC chair Gensler flags crypto risks to the public.

Former SEC Chair’s Crypto Warning

Former SEC Chair Gary Gensler warned investors to recognize crypto’s speculative and volatile nature, even as the asset class sees broader acceptance in mainstream finance and the Trump White House. Speaking in a Bloomberg interview on December 2, 2025, Gensler stressed that most of the 10,000 to 15,000 crypto projects lack full disclosures, exposing retail participants to undue risks. This comes amid crypto’s integration into U.S. capital markets, where President Trump’s pro-Bitcoin stance has boosted sentiment.

Gensler’s Risk Assessment

Gensler described crypto as rife with bad actors, fraud, and sentiment-driven trading rather than fundamentals. Many projects resemble high-risk venture bets unlikely to endure, with billions lost in past collapses. He noted that 7-9% of the public invests without adequate safeguards, and he pushed for consistent rules on brokers and advisors.

The ex-regulator highlighted stalled oracle data and pricing errors in outages, akin to recent Chicago Mercantile Exchange disruptions under scrutiny. No on-chain funds vanished in such events, but liquidations hit traders hard. Gensler affirmed belief in markets but called for protections to curb manipulation.

Regulatory Outlook Under Trump

President Trump’s reelection and January 2025 inauguration signal a shift, with promises to position America as the “Bitcoin superpower.” Yet Gensler insists work remains on disclosures for altcoins beyond Bitcoin, which trades as a commodity. During his tenure, he enforced cases against non-compliant platforms, aiming to foster behaviour change.

Meanwhile, House Republicans have initiated a congressional investigation into the Securities and Exchange Commission (SEC) following the discovery that text messages from former Chair Gary Gensler were deleted during his tenure. The core issue is the accusation of double standards. Lawmakers say Gensler has been tough on Wall Street firms over record-keeping rules, yet his own agency lost internal communications because of a poorly managed IT policy. What’s worse, some of the deleted records were linked to crypto enforcement cases—meaning important pieces of regulatory history may now be missing. The situation only adds to growing doubts about the SEC’s technical competence and its commitment to absolute transparency.