SEC Chair Gensler Warns a Lot of Crypto Tokens Will Fail Following LUNA, UST Collapse – Regulation Bitcoin News

Gary Gensler (chairman of U.S. Securities and Exchange Commission) has said that many cryptocurrency tokens would fail and that crypto investors would be hurt by the collapse of terra and stablecoin terrausd.

SEC Chair Gensler’s Warning After LUNA and UST Collapse

Gary Gensler, Chairman of the U.S. Securities and Exchange Commission expressed concern Wednesday about how more investors in crypto will be hurt following the implosions of stablecoins terrausd and cryptocurrency terra.

Following a House Appropriations Committee hearing, he said to reporters:

I think a lot of these tokens will fail … I fear that in crypto… there’s going to be a lot of people hurt, and that will undermine some of the confidence in markets and trust in markets writ large.

Last week algorithmic stabilitycoin UST lost the peg it had to the U.S. Dollar, sending the cryptocurrency LUNA’s price into free fall.

Regulators and legislators are concerned about the collapse of these cryptocurrencies. Janet Yellen from the U.S. Treasury cited the collapse in UST last week while calling for more regulation of stablecoins.

Gensler stated Wednesday that SEC registered asset managers don’t have significant exposure crypto assets. Gensler noted, however, that private funds are less visible to his agency, especially family offices. According to the SEC chief, most cryptocurrency are securities. He has been encouraging cryptocurrency trading platforms that use cryptocurrency to contact the SEC to register.

“There is a path forward that we’re talking with these exchanges about to do both: to get the platforms registered and have a pathway for the tokens as well,” he said, noting that the agency has the authority to create exemptions where necessary. He also said that:

They should move towards getting registered or, you know, we’re going to be the cop on the beat, and we’re going to bring the enforcement actions.

Gensler, however, has come under fire for his enforcement-centric approach when it comes to the regulation of crypto. He announced earlier this month that the SEC plans to nearly double the size of its Enforcement Division’s crypto unit.

On Wednesday, the chairman of SEC stated that his organization does not have sufficient resources to properly police financial markets. He stressed:

We’re really outpersonned.

Gensler was notified by U.S. Representative Tom Emmer, commenting on SEC’s lack of resources.

You put all of the SEC’s taxpayer funded resources into crypto crackdowns. Now you don’t have the funds to do your actual job so you’re coming to Congress for more? You’ve got to be kidding me.

What do you think about Gary Gensler’s comments and his crypto regulatory approach? Please leave your comments below.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.