New SEC chair: Bitcoin is not going to reach any potential

Chairman of the Securities and Exchange Commission Gary Gensler argued on Thursday that the Bitcoin industry is not going to reach any potential if it tries to stay outside our laws.

He specified that those laws include those related to money laundering, tax compliance, and the SEC's focus on investor protection.

Bitcoin and other cryptocurrencies are still being unregulated within the U.S. financial system.

On Mornings with Maria on Thursday, Gensler provided the insight to the industry as the industry has been waiting to see how the historic appointee will approach oversight of crypto markets, which he had reportedly told to be brought within Democratic financial regulation.

Gensler termed the emerging technologies on Thursday, but also pointed out potential risks associated with the innovative industry.

Gensler told FOX Business host Maria Bartiromo on Thursday that the SEC is neutral on crypto, but not in regard to investor protection.

He stressed that his agency focuses on investor protections, especially for working families.

Earlier this month, Gensler called on Congress to give the SEC more authority to better police cryptocurrency trading, lending and platforms, Reuters reported, noting that he described crypto markets as a Wild West plagued with fraud and investor risk.

Gensler reportedly said that the market involves many tokens, which could be high-risk securities, and therefore, could leave prices open to manipulation and millions of investors vulnerable to risks.

In April, cryptocurrencies reached a record capitalization of $2 trillion as more investors poured in investments of digital tokens.

Bitcoin had been trading lower in this week. The currency declined by more than 1% in the morning as the cryptocurrencies dropped. On Thursday morning the price was around $44,300 per coin and rose to around $45,700 Thursday afternoon, according to Coindesk.

For year-to-date returns, however, bitcoin is up 56% courtesy of a strong showing by bullish traders throughout the first half of this month as prices steadily rose from $38,000 on Aug. 4 to around $48,190 on Saturday.

Coindesk reported that Rivals Bitcoin and Ethereum would be trading around $3,066 and 31 cents per coin, respectively, according to the CoinDesk.

From Tuesday, concerns about cryptocurrencies were raised by Neel Kashkari, president of the Federal Reserve Bank of Minneapolis.

I was optimistic about crypto and bitcoin, said Kashkari. So far what I've seen is 95% fraud, hype, noise and confusion.

Kashkari reported comments during a performance at the annual summit of the Pacific NorthWest Economic Region in Big Sky, Montana, and made by Coindesk.

Kashkari contrasted the open nature of crypto with the U.S. government's monopoly in the currency issue field.

The central banker said there are many thousands of garbage coins that have been created. Some of them are complete fraud Ponzi schemes. They dupe people into investing money and then the founders rip them off.

Kashkari scoffed at the idea that Bitcoin could be a safe haven from inflation, particularly in some developing countries.

Gensler noted on Thursday that the interest in crypto innovations have shown that we all want our payments to be cheaper and faster.

In April, the Senate confirmed Gensler, Biden's president, as Chairman of the Securities and Exchange Commission in April. Gensler was a former financial regulator and Goldman Sachs Group Inc. executive, "International Financial Services Authority". He ran the Commodity Futures Trading Commission, a smaller regulatory sibling to the SEC, from 2009 to 2013, according to The Wall Street Journal, which added that he has a history of shaking up the status quo.

The newspaper reported that while at the Commodity Futures Trading Commission he steamrolled the opposition to write rules from scratch for hundreds of trillions of dollars of derivatives, adding that some of these complex financial instruments were blamed for the 2008 - 09 financial crisis.

Gensler asked Bartiromo what his priorities are as SEC Chair in his new role.

Technology is rapidly changing markets and we can't take for granted that we have the best markets, he responded. I would like that, at the end of my tenure, we had left the market better.

He went on to say that he believes there are definitely things we can do to make certain parts of the market transparent.