Crypto Crusader: SEC Chair Gensler Plans To Better Regulate Crypto Exchanges To Protect Investors!
Securities and Exchange Commission Chair Gary Gensler revealed that his agency is seeking to exercise greater regulatory oversight of the $2 trillion cryptocurrency market in order to protect investors from the threat of scams.
In a virtual speech during an annual conference, Gensler reiterated the agency's three-part mission: protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets. SEC plans to register and regulate crypto platforms, including working to separate out the custody of assets to minimize risk.
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"These crypto platforms play roles similar to those of traditional regulated exchanges," Gensler said, during the Penn Law Capital Markets Association's annual conference. "Thus, investors should be protected in the same way."
Gensler provided details about his plans to address the crypto market almost a month after President Joe Biden signed an executive order calling on the government to examine the risks and benefits of cryptocurrencies. Crypto assets worth more than $14 billion were stolen last year through a host of scams as well as cyberattacks.
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According to Gensler, The SEC will partner with the Commodity Futures Trading Commission to address platforms that trade both crypto-based security tokens and commodity tokens, as the SEC currently only oversees those that trade securities.
He compared crypto-asset platforms to alternative trading systems. The critical difference, he said, is that the latter is used primarily by institutional investors while crypto platforms "have millions and sometimes tens of millions of retail customers directly buying and selling on the platform without going through a broker."
Regulators have long had effective ways to regulate financial markets, said Gensler, and the emergence of new technologies doesn't mean we throw out the playbook. "We ought to apply these same protections in the crypto markets," he expressed. "Let's not risk undermining 90 years of securities laws and create some regulatory arbitrage or loopholes."