SEC Chair Gensler Says Cryptocurrency Exchanges Need More Regulation, Asks Congress to Weigh in
The new chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, is pushing for more regulation around cryptocurrency exchanges, citing the need for investor protection in this area. He has asked Congress to weigh in.
SEC Chairman Pushes for More Crypto Regulation
SEC Chairman Gary Gensler talked about cryptocurrency regulation on Thursday at a Financial Industry Regulatory Authority (FINRA) conference. FINRA is a government-authorized not-for-profit organization that oversees U.S. broker-dealers.
“At the SEC, we are focused on going after misconduct wherever we find it in the financial system,” Gensler began. “That means holding individuals and companies accountable, without fear or favor, across the approximately $100 trillion capital markets we oversee.”
On the topic of cryptocurrency regulation, the new SEC chairman highlighted the need for more investor protection. Emphasizing that he would like to see more regulation around cryptocurrency exchanges, including those that solely trade bitcoin and are not currently required to register with the SEC, he asserted:
This is a quite volatile, one might say highly volatile, asset class, and the investing public would benefit from more investor protection on the crypto exchanges.
Gensler explained that “there is no authority to register and write rules to protect the investing public” when it comes to crypto exchanges, reiterating that “ The investing public would benefit from more regulation” in this area.
The SEC chairman also revealed that he has asked Congress to consider the issue.
He also clarified that crypto tokens that are issued in the same way as traditional investment tokens fall under the SEC’s jurisdiction, noting that the agency has taken around six dozen enforcement actions against those offering unregistered securities. “And there are hundreds of tokens out there, so we’ll continue through examination and enforcement doing what we can in that space,” he opined. According to independent research, the SEC has brought about 75 enforcement actions on the crypto industry so far.
In addition, Gensler stressed the need for the SEC to update its rules around cryptocurrency marketing and how it is being used, including through game-like features on mobile applications offered by retail brokerages, robo-advisors, and wealth management firms.
“We need to do whatever we can to ensure that bad actors aren’t playing with working families’ savings and that the rules are enforced aggressively and consistently,” Gensler affirmed. “Individual accountability is an important part of any enforcement agenda. I believe we should continue to pursue bars and similar relief, where appropriate, to protect the public.” The SEC chairman opined:
Technology is always evolving, as are our markets. As we continue to stay abreast of those developments, the SEC and FINRA should be ready to bring cases involving issues such as crypto, cyber, and fintech.
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