SEC chairman wants cryptocurrency companies to be regulated.
The cryptocurrency market is compatible with securities laws, says Gensler
The volatile and non-compliant nature of the market puts investors at risk, he added.
Gensler calls for crypto regulation
Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), told the U.S. Treasury Department’s Financial Stability Oversight Council (FSOC) that it is crucial to regulate crypto companies.
According to the SEC chair, regulating cryptocurrency issuers and intermediaries will ensure investors are adequately protected. His speech comes as the hearing for the recent FTX collapse continues. Gensler said;
“Nothing about the crypto markets is incompatible with the securities laws. Yet risks from this speculative, volatile, and what I believe is a largely non-compliant market put investors at risk. This is why bringing intermediaries and issuers of crypto securities tokens into compliance is so important. While the risks from the crypto markets generally do not appear to date to have spread to the traditional financial sector, we must remain vigilant to guard against that possibility.”
The SEC chair supports the FSOC’s report
On Friday, the Financial Stability Oversight Council unanimously approved its 2022 annual report. While commenting on this latest cryptocurrency news, Gensler said he supports the report.
The report by the U.S. Treasury Department wants regulatory agencies to implement the existing rules on crypto companies. Gensler said;
“The Council emphasises the importance of agencies continuing to enforce existing rules and regulations applicable to the crypto-asset ecosystem.”
The report recognises that there are some differences between the traditional financial markets and the cryptocurrency market. For this reason, the council recommended that;
“The enactment of legislation providing for rulemaking authority for federal financial regulators over the spot market for crypto-assets that are not securities. Steps should be taken to address regulatory arbitrage since crypto-asset entities offer services similar to traditional financial institutions but do not have a consistent or comprehensive regulatory framework.”
Gensler’s comment comes a few days after two U.S. senators, including Elizabeth Warren, introduced a bipartisan bill that seeks to regulate the cryptocurrency market. The bill, titled “Digital Asset Anti-Money Laundering Act,” is seen by some in the industry as the most direct attack on the personal freedom and privacy of crypto users and developers