US Securities and Exchange Commission (SEC) Gary Gensler will appear before the Senate Committee on Banking, Housing, and Urban Affairs at 10 a.m. ET today, where he will be talking about crypto assets.
In his prepared remarks that were released ahead of the meeting, Gensler reiterated that as of right now, “large parts” of the crypto market are not operating within the regulatory frameworks that protect investors, guard against illicit activity, and ensure financial stability.
“We just don’t have enough investor protection in crypto finance, issuance, trading, or lending.”
“At this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.”
His statement primarily repeats the remarks made by him on cryptocurrency so far this year, noting how this asset class is rife with fraud, scams, and abuse, adding that the agency’s focus is on working with other financial regulators to bring investor protection to these markets.
Additionally, the focus is on filling the gaps with Congress’s assistance in regards to the offer and sale of crypto tokens, crypto trading and lending platforms, stablecoins, investment vehicles providing exposure to crypto-assets or derivatives, and custody of crypto.
Gensler further noted that the SEC is already working with sibling agency the CFTC along with the Federal Reserve, Department of Treasury, Office of the Comptroller of the Currency, and other members of the President’s Working Group on Financial Markets on these matters.
“I’ve suggested that platforms and projects come in and talk to us.”
According to Gensler, with platforms having thousands of tokens, it is “quite remote” that not a single one of them is a security. As such, in that case, under the current laws, these crypto exchanges “have to register with the Commission unless they qualify for an exemption.”
The tech and the regulatory framework need to adapt to one another. This should be a two-way street. https://t.co/nwXTQnVhGi
— Alex Krüger (@krugermacro) September 14, 2021
The former Goldman Sachs partner, who was also the chair of the CFTC during the Obama administration, said that while “this technology has been and can continue to be a catalyst for change,” technologies don’t last long outside of the regulatory framework. He believes the SEC, along with the CFTC and others, can have
“more robust oversight and investor protection around the field of crypto finance.”
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