U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler outlined what to expect from a securities watchdog in the field of cryptocurrency regulation. “We have strong congressional powers to also use our exclusive powers, which we can adapt to protect investors,” he explained.
Chairman Gensler highlights SEC work on regulating cryptocurrencies
SEC Chairman Gary Gensler on Thursday revealed what to expect from his U.S. cryptocurrency regulatory agency in an interview with Yahoo Finance Live. He was asked: “What can we expect from the SEC in the coming months in the field of cryptocurrency regulation?”
Gensler responded, “More broadly, the public would benefit right now from protecting investors from these various service providers…exchanges, lending platforms and broker-dealers.” The head of the SEC clarified:
So we at the Securities and Exchange Commission work in each of these three areas – exchanges, lending, and brokerage – and we’re talking with industry participants about how to meet or change some of these requirements.
Gensler stressed that he has repeatedly told crypto exchanges, trading platforms and lending platforms, “Come on in, talk to us.”
He explained that the SEC has the authority from Congress to change some of the rules to better protect investors, stating:
We have strong powers from Congress to use our exclusive powers as well, which we can tailor to protect investors.
He noted that the securities watchdog could even tailor disclosures for the tokens themselves, adding that perhaps not all disclosures for someone issuing shares are applicable to cryptocurrency issuers.
“The public benefits by knowing full and honest disclosure and that no one is lying to them…basic protection,” the head of the SEC said.
Regarding what to expect from his cryptocurrency regulatory agency, Gensler also shared:
We also cover tokens, stablecoins and unstable coins. Separately, we are negotiating with banking regulators and with our friends and colleagues from the CFTC.
He reiterated that “Bitcoin is not a security token,” adding that for non-security tokens, the SEC will send information to the Commodity Futures Trading Commission (CFTC) and “cooperate to the extent possible.” In June, Gensler stated that bitcoin is a commodity, but did not comment on other crypto tokens, including ether (ETH).
The SEC chairman proposed in May a “single set of rules” for regulating crypto tokens. At the time, he revealed that he was working on a memorandum of understanding with his CFTC colleagues, noting that it would be a formal deal to provide adequate guarantees and transparency for digital asset trading.
Following the collapse of the terra cryptocurrency (LUNA) and the terrausd (UST) stablecoin, Gensler warned that many crypto tokens would fail. He also warned investors about “too good to be true” crypto products after crypto lender Celsius Network froze withdrawals.
The SEC is currently reviewing Celsius for its decision to freeze accounts. The crypto firm filed for bankruptcy protection last week. The Securities Regulator is also investigating Terraform Labs and Do Kwon’s UST.
What do you think of SEC Chairman Gary Gensler’s comments on crypto regulation? Let us know in the comments below.
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