Cryptocurrency exchanges can look forward to stricter oversight from the US Securities and Exchange Commission (or SEC), President Gary Gensler said, according to the US Securities and Exchange Commission. Bloomberg.
“I asked the team to look at all the ways to bring these platforms into the realm of investor protection. If trading platforms do not enter the regulated sector, it will be another year of vulnerability for the public,” the president said during a video conference on Wednesday (19).
His comments come amid another cryptocurrency-related hack. This Thursday (20), the Crypto.com confirmed have lost nearly $34 million to hackers.
However, this is far from the first time Gensler has warned about consumer protections when it comes to cryptocurrencies.
In 2021, the SEC chairman emphasized the need for consumer protection laws applicable to crypto in an interview with CNBC.
“We are an investment protection agency, and right now this asset class, bitcoin and hundreds of other currencies that investors are trading, is a speculative asset class. What we want is to provide some basic protections against fraud and manipulation,” said Gensler.
His call for customer protections has also gained political support, most notably from Senator Elizabeth Warren, who called for “rules of the road” for this industry and lamented that crypto puts the financial system in the hands of “dark programmers”.
Gary Gensler and Crypto Regulation
When it comes to cryptocurrencies, protecting customers is one of Gensler’s top priorities, but he also talked about other issues related to the industry.
Speaking to the Aspen Security Forum in 2021, Gensler said that thousands of Decentralized Finance (or DeFi) “tokens” are possibly being traded as unregistered securities.
“Decentralized Finance Platforms don’t just involve securities laws – some platforms may also involve commodity laws and banking laws,” he explained.
He also said that cryptocurrencies do not meet functional cash requirements and facilitate criminal activities.
*Translated and edited by Daniela Pereira do Nascimento with permission from the Decrypt.co.