SEC Chairman Gary Gensler says there is no need to treat the crypto-currency market differently from other capital markets. Noting that “the SEC will serve as a cop on the beat“, Gary Gensler encouraged crypto exchange and lending platforms “to come talk to the SEC staff.“
SEC Chairman Gary Gensler on the regulation of crypto-currencies.
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler penned an article published Friday in the Wall Street Journal on how crypto assets should be regulated. He described:
There is no reason to treat the crypto market differently from the rest of the financial markets simply because it uses a different technology.
“Recent market events show why it is critical for crypto companies to comply with securities laws“, explained Gary Gensler. “In recent months, some crypto lending platforms have frozen their investors’ accounts or gone bankrupt. In case of bankruptcy, these investors have to queue up in court.“
The SEC boss pointed out that regardless of the financial product, whether it’s an app, a lending platform, a crypto-currency exchange or a decentralized finance platform (defi):
Through decades of cases, the Supreme Court has made clear that the economic realities of a product – not the labels – determine whether it is a security under the securities laws.
While recognizing that “there are costs to complying with securities laws, just as there are costs for car manufacturers to add seat belts“, the SEC Chairman noted that “there is a way forward“.
Gary Gensler then reiterated that he encourages crypto-currency exchange and lending platforms “To come in and talk to the SEC staff“, noting that “bringing these platforms into compliance with securities laws will benefit investors and the crypto-currency market.“The SEC chief concluded:
In the meantime, the SEC will play the role of cop on patrol. Like seat belts in cars, we need to make sure that investor protections are standard in the crypto-currency market.
Gary Gensler recently described what to expect from the SEC when it comes to crypto-currency regulation. He has been heavily criticized for taking an enforcement-centric approach to regulating the crypto market. The SEC boss also said that while bitcoin is a commodity, most crypto-currencies have securities attributes, warning that many will fail.