The head of the Securities and Exchange Commission (SEC) Gary Gensler, during a hearing in the US House of Representatives, called for the development of a regulatory framework for the functioning of cryptocurrency exchanges. In his opinion, they must do this to regulate the work with digital assets in the United States.
The head of the American department believes that many financial projects have appeared in the cryptocurrency industry. Their number makes it difficult to protect the interests of users. Accordingly, control over Bitcoin exchanges should be strengthened.
“We could work with Congress to try to protect investors where these – sometimes commodities, sometimes securities (cryptocurrencies) – are traded”, the official said.
Gensler expects to provide protections similar to those applied to the New York Stock Exchange and the Nasdaq.
The SEC chairman noted that the agency may need additional funding to develop and enforce these rules. According to him, the regulator currently spends about 16% of the budget on new technologies. Cryptocurrencies create additional risks that require large resources.
Protection of investors — one of the main goals of financial regulators
Gensler called the protection of investors, including cryptocurrencies, one of the main goals of federal financial regulators.
“This market, approaching $ 2 trillion. The crypto asset market, could benefit from increased investor protection, Gensler said. I really believe that only Congress can actually solve this problem. It is worth considering bringing stronger investor protection to cryptocurrency exchanges. Currently, the exchanges that trade these cryptoassets not regulated by either the SEC or our sister agency, the CFTC. This would increase confidence. Now there is no market regulator that would deal with these exchanges. Accordingly, there is no real protection against fraud or manipulation”.
If the regulatory framework not developed, then the US will not be able to provide US investors with adequate protection.
In general, Gensler’s coming to the post of head of the SEC associated with positive expectations. He is someone who understands cryptocurrencies. Gensler taught a course on cryptocurrencies and blockchain at the Massachusetts Institute of Technology, of which he is a professor. The SEC chairman also noted that the department is dealing with the impact of social networks on financial markets.
SEC advocates greater control
In early May, Gary Gensler already pointed to the lack of rules for crypto exchanges as the biggest gap in the regulation of cryptocurrencies in the United States. Then he said that the crypto market will only benefit from the fact that the authorities will create additional measures to protect investors.
In addition, the head of the Securities and Exchange Commission (SEC) pointed out the need for an early transfer of the work of trading platforms to the legal field.
However, industry representatives fear that if the regulator really begins to tighten control over crypto-exchanges, then investors may have problems in carrying out large transactions.
For example, Coinbase Global has already passed several reviews, including a review by the SEC before going public in April. Earlier, the Department of Justice and the US Internal Revenue Service initiated an investigation into the world’s largest cryptocurrency exchange Binance. State authorities conduct inspections for violations in the field of combating money laundering and tax laws. So far, no charges have been leveled against the site.