Thursday, May 19, 2022

Crypto exchanges can expect stricter scrutiny, SEC chair Gary Gensler warns.

The Takeaway:

Cryptocurrency exchanges can expect stricter scrutiny from the Securities and Exchange Commission (SEC), according to chair Gary Gensler.

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According to the Bloomberg report, SEC chair Gary Gensler has warned that cryptocurrency exchanges can expect stricter scrutiny from the securities regulator. “I’ve’ asked staff to look at every way to get these platforms inside the investor protection remit. If the trading platforms don’t’ come into the regulated space, it’d’ be another year of the public being vulnerable,” the SEC chair reportedly said during a virtual conference yesterday. 

 

Gary Gensler had emphasized the need for consumer protection laws.

SEC chair Gary Gensler’s comments come amid yet another crypto-related hack. Earlier today, crypto exchange Crypto.com confirmed the exchange lost almost $34 million to hackers. However, this is far from the first time Gensler has raised consumer protection alarm bells when it comes to crypto. Last summer, the SEC chair emphasized the need for consumer protection laws being applied to crypto during an interview with CNBC. The SEC chair had called bitcoin and other cryptocurrencies “a speculative asset class.” He wanted SEC to provide basic protection to those investors. 

 

SEC chair said DeFi tokens potentially operating as unregistered securities. 

Protecting consumers has been Gensler’s highest priority, but he’s also chimed in on other issues facing the industry. Speaking at the Aspen Security Forum last year, the SEC chair said that thousands of decentralized finance (DeFi) “tokens” are potentially operating as unregistered securities. “Decentralized finance platforms not only can implicate the securities laws—but some platforms also can implicate the commodities laws and the banking laws,” he said. He has also said that cryptocurrencies do not satisfy the functional requirements of money, and they facilitate criminal activity.    

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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