The chair of the Securities and Exchange Commission (SEC), Gary Gensler, has stated that the world does not need more digital currency, citing the existence of digital investments as a viable alternative. His comments come amid legal action against cryptocurrency exchanges Coinbase and Binance by the SEC, which has caused controversy in the industry.

Despite Gensler’s negative stance towards digital currencies and lack of regulation in the crypto industry, he assures that the SEC remains merit neutral. This means that the agency will evaluate cases based on evidence and facts alone, without bias towards any particular industry or stance.

In the case of Coinbase, the SEC has sued the exchange for allegedly violating federal securities law by operating as an unregistered broker, exchange, and clearing agency. The suit does not name CEO Brian Armstrong or other executives but focuses on the company’s Prime, Wallet, and staking products, as well as the tokens it lists, as areas where it violated federal securities laws. The SEC is seeking to “permanently enjoin” the company from continuing these violations, and is looking to force disgorgement and civil penalties.

In response to the lawsuit, Armstrong has tweeted that Coinbase is confident in its facts and the law, and welcomes the chance to get clarity around crypto rules in court. Coinbase has also called for crypto-specific legislation to be developed, indicating a willingness to work with regulators to resolve any compliance concerns.

As the crypto industry continues to evolve, it is crucial that exchanges and other players comply with relevant regulations to ensure a secure and stable financial system. While digital investments provide an alternative to digital currencies, blockchain technology remains a powerful tool with potential to transform various industries. As such, regulators and industry players must work together to balance innovation and compliance to support this transformation.