According to Gary Gensler, Chair of the US Securities and Exchange Commission (SEC), the crypto industry is suffering from a lack of disclosure and excessive leverage.

The SEC Chair's remarks on Thursday come at a time when the crypto sector is once again in the spotlight. This time, it's the surprise of what happened with the FTX cryptocurrency exchange.

The combination of leverage and nondisclosure is a "toxic mix."

As has been widely reported, FTX's implosion is the result of Alameda Research losing billions in trading and leaving FTX with a $8 billion hole. Customers of FTX were entitled to that money.

"When you mix together a bunch of customer money and borrow against it, investors get hurt," Gensler said on CNBC's 'Squawk Box' with Andrew Ross Sorkin.

"This is a very interconnected world in crypto with a few concentrated players," he added. When the markets turned against them, it appears that many customers lost money."

Gensler has previously urged cryptocurrency exchanges and other providers to embrace regulation and provide more 

"It's a field that's significantly non-compliant, but it's regulated," the SEC Chair said, noting that crypto investors from all over the world are being ripped off. Aside from leverage, consumers are succumbing to celebrity endorsements, with little disclosure.

"This is not the NYSE or the Nasdaq." These platforms coexist. It's a dangerous combination of taking people's money and borrowing against it. However, there is little disclosure, and they then trade against their customers," the 

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