The U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler says crypto investors need to be protected from fraud and is encouraging more legislative oversight over the nascent digital asset space.
Gensler, who taught a course titled “Blockchain and Money” at the Massachusetts Institute of Technology, says that he is “not neutral” with regard to investor safeguards.
“While I’m neutral on the technology, even intrigued – I spent three years teaching it, leaning into it – I’m not neutral about investor protection. If somebody wants to speculate, that’s their choice, but we have a role as a nation to protect those investors against fraud.”
In a speech to the Aspen Security Forum, Gensler says that the crypto space is a “Wild West” in need of more investor protection.
“Certain rules related to crypto assets are well-settled. The test to determine whether a crypto asset is a security is clear.
There are some gaps in this space, though: we need additional Congressional authorities to prevent transactions, products, and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector. We stand ready to work closely with Congress, the Administration, our fellow regulators, and our partners around the world to close some of these gaps.
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.
If we don’t address these issues, I worry a lot of people will be hurt.”
Gensler names a few key areas where he would like “legislative priority” focused on.
“In my view, the legislative priority should center on crypto trading, lending, and DeFi (decentralized finance} platforms. Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending.
Right now, large parts of the field of crypto are sitting astride of – not operating within – regulatory frameworks that protect investors and consumers, guard against illicit activity, ensure for financial stability, and yes, protect national security.
Standing astride isn’t a sustainable place to be. For those who want to encourage innovations in crypto, I’d like to note that financial innovations throughout history don’t long thrive outside of our public policy frameworks.”
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The post SEC Chief Calls Out ‘Regulatory Gaps’ in Crypto Industry, Says Agency Needs Boost From Congress appeared first on The Daily Hodl.
