- PostedJuly 30, 2022
- Byalletec
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The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has published a video explaining how the agency plans to regulate crypto exchanges. “I’ve asked our staff to work directly with the platforms to get them registered and regulated,” the SEC chief revealed.
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler published a video Thursday explaining how the securities watchdog plans to regulate crypto exchanges and provide investor protection.
Gensler explained in the video the similarities and differences between crypto trading platforms and traditional exchanges like the New York Stock Exchange (NYSE). “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 added:
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 then brought up another risk factor inherent to crypto 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. Some people accuse Gensler of spending time and resources promoting himself instead of doing his job regulating the crypto sector. Others slammed the SEC for using an enforcement-centric approach to 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.
What do you think about the video by SEC Chairman Gary Gensler on regulating crypto exchanges? Let us know in the comments section below.
- Tags:crypto, crypto adoption, Crypto Mining, crypto news, Cryptocurrency
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