U.S. Securities Regulator Says Crypto Events Underscore Industry Risks

The turmoil in the cryptocurrency industry of the last few days underscores the risks inherent in the industry as intermediaries handle so many core functions, the head of the top U.S. markets regulator said on Wednesday.

Securities and Exchange Commission (SEC) Chair Gary Gensler used the events of the last few days - centered on concerns over the financial healthy of major cryptocurrency exchange FTX - to emphasize the risks of a crypto industry that has been operating outside of traditional financial markets' oversight.

"I've been saying this for well over a year now in this job: come in, get registered, come within the securities laws," Gensler said during a Healthy Markets Association event.

Gensler noted risks from the "commingling" of key intermediary functions in the cryptocurrency world, in which the same firms serve multiple roles, such as exchanges and market makers.

Cryptocurrencies have historically fallen into regulatory gray areas. The SEC, which is investigating FTX's handling of client funds, has ratcheted up scrutiny of the crypto industry under Democratic leadership.