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Former US Securities and Exchange Commission Chair Gary Gensler renewed his warning to investors about the risks of cryptocurrencies, calling most of the market âhighly speculativeâ in a new Bloomberg interview on Tuesday.
He carved out Bitcoin (BTC) as comparatively closer to a commodity while stressing that most tokens donât offer âa dividendâ or âusual returns.â
Gensler framed the current market backdrop as a reckoning consistent with warnings he made while in office that the global publicâs fascination with cryptocurrencies doesnât equate to fundamentals.
âAll the thousands of other tokens, not the stablecoins that are backed by US dollars, but all the thousands of other tokens, you have to ask yourself, what are the fundamentals? Whatâs underlying it⊠The investing public just needs to be aware of those risks,â he said.
Genslerâs record and industry backlash
Gensler led the SEC from April 17, 2021, to Jan. 20, 2025, overseeing an aggressive enforcement agenda that included lawsuits against major crypto intermediaries and the view that many tokens are unregistered securities.
Related: House Republicans to probe Gary Genslerâs deleted texts
The industry winced at highâprofile actions against exchanges and staking programs, as well as the posture that most token issuers fell afoul of registration rules.
Under Genslerâs tenure, Coinbase was sued by the SEC for operating as an unregistered exchange, broker and clearing agency, and for offering an unregistered staking-as-a-service program. Kraken was also forced to shut its US staking program and pay a $30 million penalty.
The politicization of crypto
Pushed on the politicization of crypto, including references to the Trump familyâs crypto involvement by the Bloomberg interviewer, the former chair rejected the framing.
âNo, I donât think so,â he said, arguing itâs more about capital markets fairness and âcommonsense rules of the road,â than a âDemocrat versus Republican thing.â
He added: âWhen you buy and sell a stock or a bond, you want to get various information,â and âthe same treatment as the big investors.â Thatâs the fairness underpinning US capital markets.
Related: Coinbase files FOIA to see how much the SECâs âwar on cryptoâ cost
ETFs and the drift to centralization
On ETFs, Gensler said finance âever since antiquity⊠goes toward centralization,â so itâs unsurprising that an ecosystem born decentralized has become âmore integrated and more centralized.â
He noted that investors can already express themselves in gold and silver through exchangeâtraded funds, and that during his tenure, the first US Bitcoin futures ETFs were approved, tying parts of cryptoâs plumbing more closely to traditional markets.
Genslerâs latest comments draw a familiar line: Bitcoin sits in a different bucket, while most other tokens remain, in his view, speculative and light on fundamentals.
Even out of office, his framing will echo through courts, compliance desks and allocation committees weighing BTCâs status against persistent regulatory caution of altcoins.
Magazine: Solana vs Ethereum ETFs, Facebookâs influence on Bitwise â Hunter Horsley
New figures reveal a 70% year-on-year increase in Cayman Islands foundation company registrations, with more than 1,300 on the books at the end of 2024, and over 400 new registrations already in 2025.
These structures are increasingly being used as legal wrappers for decentralized autonomous organizations (DAOs) and as ecosystem stewards for major Web3 projects.
According to a news release from Cayman Finance, many of the worldâs largest Web3 projects are now registered in the Cayman Islands, including at least 17 foundation companies with treasuries over $100 million.
Why DAOs are choosing Cayman
The Cayman foundation company has emerged as a preferred tool for DAOs that need to sign contracts, hire contributors, hold IP and interact with regulators, all while shielding tokenholders from personal liability for the DAO’s obligations.
The legal wakeâup call for many communities came in 2024 with Samuels v. Lido DAO, in which a US federal judge found that an unwrapped DAO could be treated as a general partnership under California law, exposing participants to personal liability.
The Cayman foundation company is designed to plug that gap, offering a separate legal personality and the ability to own assets and sign agreements, while giving tokenholders assurance that they are not partners by default.
Add tax neutrality, a legal framework familiar to institutional allocators and an ecosystem of companies that specialize in Web3 treasuries, and it becomes clear why more projects have quietly redomiciled their foundations to Grand Cayman.â
Elsewhere, policymakers have made big promises but delivered patchwork. US President Donald Trump has repeatedly pledged to turn the United States into the âcrypto capital of the planet,â but at the entity level, only a handful of states explicitly recognize DAOs as legal persons.
Switzerland remains the archetypal onshore Web3 foundation center, with the Crypto Valley region now hosting over 1,700 active blockchain firms, up more than 130% since 2020, with foundations and associations representing a growing share of new structures.
Related: Switzerlandâs Crypto Valley hits $593B with 17 unicorns in 2024
From lightâtouch haven to compliance player
The surge in Web3 foundations coincides with a shift in Caymanâs own regulatory posture â the arrival of the Organisation for Economic Co-operation and Developmentâs CryptoâAsset Reporting Framework (CARF), which the Cayman Islands has now implemented via new Tax Information Authority regulations that take effect from Jan. 1, 2026.â
CARF will impose due diligence and reporting duties on Cayman âReporting CryptoâAsset Service Providersâ (entities that exchange crypto for fiat or other crypto, operate trading platforms or provide custodial services), requiring them to collect taxâresidence data from users, track relevant transactions and file annual reports with the Tax Information Authority.
Legal professionals note that CARF reporting under the current interpretation applies to relevant crypto-asset service providers, including exchanges, brokers and dealers, which likely leaves structures that merely hold crypto assets, such as protocol treasuries, investment funds, or passive foundations, off the hook.
âThe key question is whether your entity, as a business, provides a service effectuating exchange transactions for or on behalf of customers, including by acting as a counterparty or intermediary or by making available a trading platform.â
In practice, that means many pure treasury or ecosystemâsteward foundations should be able to continue benefitting from Caymanâs legal certainty and tax neutrality without being dragged into full reporting status, so long as they are not in the business of running exchange, brokerage or custody services.
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