SEC Chairman Gary Gensler says that there is no need to treat the crypto market differently from other capital markets. Noting that “the SEC will serve as the cop on the beat,” Gensler encouraged crypto trading and lending platforms “to come in and talk to SEC staff.”
SEC Chairman Gensler on Crypto Regulation
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, authored an opinion piece published in the Wall Street Journal Friday on how crypto assets should be regulated. He described:
There’s no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology.
“Recent market events show why it is critical that crypto firms comply with securities laws,” Gensler explained. “In recent months, some crypto lending platforms have frozen their investors’ accounts or gone bankrupt. When it comes to bankruptcy, these investors have to get in line at the court.”
The SEC chief stressed that no matter what the financial product is, whether it is an app, a lending platform, a crypto exchange, or a decentralized finance (defi) platform:
Across 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 acknowledging that “There are costs of complying with securities laws, just as there are costs to car makers of adding seat belts,” the SEC chairman pointed out that “there is a path forward.”
Gensler then reiterated that he encourages crypto trading and lending platforms “to come in and talk to SEC staff,” emphasizing that “Getting these platforms into compliance with the securities laws will benefit investors and the crypto market.” The SEC chief concluded:
In the meantime, the SEC will serve as the cop on the beat. As with seat belts in cars, we need to ensure that investor protections come standard in the crypto market.
Gensler recently outlined what to expect from the SEC on crypto 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 tokens have attributes of securities, warning that a lot of them will fail.
