Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), stated on Monday that his agency intends to increase regulatory control of the cryptocurrency industry in order to safeguard investors from an assault of scams.
Gensler made this statement virtually at the annual conference of the Penn Law Capital Markets Association.
The SEC Chairman said that the American markets regulator intends to register and regulate crypto platforms, including working to separate asset custody to minimise risk.
Gensler made a comparison between cryptocurrency platforms and alternative trading methods, which are employed in the stock and fixed income markets. The crucial distinction, he explained, is that the latter is predominantly utilised by institutional investors, whereas crypto platforms have ordinary clients.
He clarified that the SEC will investigate whether cryptocurrency platforms should be treated more like retail exchanges.
Gensler also discussed the SEC's authority over stablecoins and crypto tokens. He stated that the $183 billion stablecoin market raises concerns, including the possibility of illicit activities. Crypto-to-crypto transactions, he explained, enable users to circumvent the regular banking system, making money laundering, taxes, and compliance more difficult to track.
In conclusion, he noted that regulators have long had successful methods for regulating financial markets, and the emergence of new technology does not change much for the regulators and they would still play by their rules.
Interestingly, Gensler’s remarks come weeks after US President Joe Biden signed an executive order directing the government to conduct an examination of the dangers and benefits of cryptocurrency.
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