Gary Gensler is the chairman of U.S. Securities and Exchange Commission. He has released a video that explains how the commission plans to regulate cryptocurrency exchanges. “I’ve asked our staff to work directly with the platforms to get them registered and regulated,” the SEC chief revealed.
SEC Chairman Gary Gensler’s Video About Regulating Crypto Exchanges
The Chairman of the U.S Securities and Exchange Commission (SEC), Gary Gensler, published Thursday’s video explaining how the Securities Watchdog will regulate cryptocurrency exchanges and protect investors.
Gensler explains in this video what the differences are between cryptocurrency trading platforms and traditional exchanges such as the New York Stock Exchange. “When you trade on a stock market, you have certain protections,” he began, adding that investors are “protected against fraud, manipulation, running, and the like.”
Noting that crypto platforms serve “millions, sometimes tens of millions” of retail customers who are directly buying and selling crypto assets without going through a broker, the SEC chairman detailed: “With so many retail customers trading on crypto platforms, we should make sure that those platforms offer similar protections” to traditional security platforms. He said:
So I’ve asked our staff to work directly with the platforms to get them registered and regulated to ensure that those crypto tokens come in as well and register where appropriate as securities.
“Imagine handing over all of your stock to the New York Stock Exchange, that would never fly,” he noted, reiterating: “Thus, I’ve asked staff how to work with platforms to best ensure your assets are protected.”
Gensler brought up another potential risk associated with cryptocurrency exchanges. “Unlike traditional securities exchanges, crypto trading platforms also may act as market makers,” he described. “When you sell your tokens, one of the platforms may actually be buying on the other side,” the SEC chairman stressed, elaborating:
Stock exchanges don’t do this, they don’t serve as their own market makers because that creates inherent conflicts of interest.
“Thus again, I’ve asked staff to consider whether it would be appropriate to segregate out the market-making functions on these crypto platforms,” he said.
In conclusion, the SEC chairman stressed: “There’s no reason to treat the crypto market differently just because a different technology is used. That would be like saying drivers of electric cars don’t need seat belts because they don’t use gas.”
He also tweeted Thursday: “We have rules in our capital markets to safeguard market integrity & protect against fraud & manipulation. If a company builds a crypto market that protects investors & meets the standard of our market regulations, people will more likely have greater confidence in that market.”
Gensler’s video received some criticism on Twitter. Gensler is accused of being too busy promoting himself rather than doing the job of regulating crypto. Others criticised the SEC for adopting an enforcement-centric approach when regulating crypto assets.
Congressman Bill Huizenga (R-MI) tweeted to Gensler, “The SEC should stop using regulation by enforcement to provide ‘clarity’ in the marketplace,” elaborating:
No exchange wants to ‘come in and register’ without knowing what those market regulations are.
A former Coinbase employee was charged in an insider trading investigation. The regulator also named nine crypto tokens securities.
How do you feel about Gary Gensler, Chairman of the SEC on regulation of crypto exchanges. Please comment below.
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