The Chair of the US Securities and Exchanges Commission, Gary Gensler, is butting heads against decades of securities laws in a bid to regulate the rapidly growing crypto industry.
Regulation For Expansion: Gensler
Despite being a crypto enthusiast, Gensler believes that the industry needs much stricter regulations. He is not a proponent of a hands-off oversight approach towards this trillion-dollar market.
Speaking at the Aspen Security Forum last week, Gensler commented,
“While I’m neutral on the technology, even intrigued, 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.”
He compared the current crypto market with the rise and growth of the automobile industry that was only able to establish a tighter hold on the economy once the government legitimized it through driving rules, speed limits, traffic lights, and other regulations.
SEC Boss Wants To Greenlight Bitcoin ETFs
However, Gensler has also discussed Bitcoin exchange traded funds (ETF) and what it would mean for the SEC to approve them. In his speech at the Aspen Security Forum, he also indicated that Bitcoin ETFs might be approved, provided they adhere to the agency’s strict mutual fund rules. So far, the SEC has balked at permitting such funds, citing risk and fraud concerns. However, Gensler’s support for ETFs during his MIT days is indicating that the latest Chair of the SEC might greenlight the first-ever crypto ETF.
Exhaustive Investigations Into All Crypto Channels
SEC members are also being encouraged by Gensler to explore potential policy changes around various crypto-focused propositions, such as initial coin offerings, trading venues, lending platforms, DeFi, stable value coins, custody, and so on. For example, he believes that regulating crypto exchanges should be the first move to set the regulatory ball roll on digital token trading. Additionally, he is also looking into peer-to-peer lending on DeFi platforms, where the pooling of digital assets can be compared to mutual funds.
Fox Correspondent Slams Gensler’s Call For Regulation
In a recent opinion piece penned down by journalist and Senior Correspondent Charles Gasparino for the New York Post, he brought up the instance when the SEC under Jay Clayton brought a case against Ripple Labs for issuing digital currency that the commission claimed were unregistered securities. However, with the courts still weighing whether the SEC overstepped its jurisdiction in filing the lawsuit and the 75 years’ worth of case law preventing the claiming of digital currency as securities, it doesn’t seem likely that Gensler will be able to employ the same maneuver.
Gasparino noted,
“Who gets to regulate what goes on inside the blockchain and the broader crypto world is still a matter of debate. Certainly, the CFTC has some say because cryptos are more closely aligned with commodities than they are with, say, stocks or bonds. Maybe the Treasury Department, since the blockchain is an alternative to the banking system and cryptos compete with dollar-based transactions.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
