The SEC chairman wants a broader regulation of the cryptocurrency market to cover decentralized finance (DeFi), stablecoins and crypto exchanges.
Gary Gensler wants more investor protection
The chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, talked about the cryptocurrency space and its regulation during an event yesterday. According to the SEC chair, the crypto space is currently a Wild West, and it needs to be regulated.
He stated that “Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West. This asset class is rife with fraud, scams, and abuse in certain applications. There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information.”
Gensler said he agrees with the former SEC chair regarding initial coin offerings (ICO), stating that they are all securities. As such, they are under the jurisdiction of the regulatory agency.
Crypto regulation should cover DeFi and stablecoins
The SEC chair added that the cryptocurrency regulation shouldn’t be restricted to just the traditional sector. The growth of the DeFi and stablecoins sectors has caught the attention of the regulators, and Gensler said they also need to be regulated.
“The world of crypto finance now has platforms where people can trade tokens and other venues where people can lend tokens. I believe these platforms not only can implicate the securities laws; but some platforms also can implicate the commodities laws and the banking laws,” he added.
Gensler believes the regulation needs to expand to cryptocurrency exchanges. With crypto exchanges hosting 50 to 100 tokens, there are bound to be security tokens on the platform, he insisted.
He said, “The American public is buying, selling, and lending crypto on these trading, lending, and DeFi platforms, and there are significant gaps in investor protection.”
Finally, the SEC chair appealed to the US Congress to grant the agency additional powers and resources as it expands its oversight of the cryptocurrency sector.