SEC chief Gary Gensler shared his concerns with the Financial Times, stating in a recent interview that cryptocurrency trading platforms need regulation in order to survive.
Having become head of the Securities Exchange Commission in April, Gensler has stated that he is “technology neutral” but believes the crypto market needs to be regulated if it is to grow and thrive, and added that communication and compliance between regulatory bodies and the crypto industry is better than ““begging for forgiveness.”
In the interview with the FT Gensler noted:
"At about $2 trillion of value worldwide, [the crypto market is] at the level and the nature that if it's going to have any relevance five and 10 years from now, it's going to be within a public policy framework,history just tells you, it doesn't last long outside. Finance is about trust, ultimately."
Gensler has called upon congress to grant the SEC greater powers when it comes to regulating the crypto market, at the Aspen security forum likening the markets to the wild wild west and outlining the need for more authority from congress with regards to regulating cryptocurrency trading, lending, and exchanges.
Senator Elizabeth Warren recently penned a letter to Gensler, in which she asked the SEC to use their powers to regulate US crypto exchanges. Gensler replied to Warren’s letter, responding the following:
“It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides a synthetic exposure to underlying securities. These products are subject to the securities laws and must work within our securities regime.”
As regulators increase their scrutiny of crypto companies, the number of penalties and fines that crypto companies have faced has also increased. While the crypto community may feel the SEC has specifically targeted the crypto industry, The SEC today sanctioned eight investment and advisory firms for failure to safeguard their customers through their cybersecurity policies which resulted in the personal details of thousands of their customers and clients being revealed.
The crypto industry is at a pivotal moment in which it will be scrutinised by regulatory authorities as the industry expands and adoption increases. Gensler may be less than bullish when it comes to crypto, however the fact remains that regulation will increase and it is time for the crypto industry to move with, rather than against, this tide.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.