Gary Gensler warns of increased regulation of DeFi and stablecoins
The US Securities and Exchange Commission (SEC) is considering the introduction of a strict oversight regime to protect cryptocurrency investors. The agency’s head Gary Gensler made the announcement at the Aspen Security Forum 2021 event, Bloomberg reports.
SEC’s protection of investors
“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,” said Gary Gensler. “If somebody wants to speculate, that’s their choice, but we have a role as a nation to protect those investors against fraud.”
According to Gensler, the “thousands” of digital assets on the market are non-registered securities that should in fact comply with SEC requirements.
He emphasised that blockchain technology and the tools created with it could stimulate the financial and other industries, but this is only possible with thoughtful regulation. Despite a recent request to expand the agency’s powers in this regard, he said, it has enough leverage over the industry.
Gensler did not mention whether the SEC was going to take any action in the near future. He explained that the agency has 49 issues on its agenda, many of which are of higher priority.
Regulating crypto exchanges
The official also did not comment on the possibility of the regulator’s approving a Bitcoin ETF, a step that many cryptocurrency industry participants, including Coinbase, expect him to take.
Instead, Gensler revealed that there are at least seven initiatives within the agency targeting different segments of the digital asset industry: ICOs, trading platforms, lending services, DeFi, stablecoins, custodians, as well as ETFs and other crypto funds.
“I’ve asked the staff to use all of our authorities anywhere we can,” he said.
Gensler reiterated that regulating cryptocurrency exchanges is the easiest way for the government to clean up the new market. The head of the SEC also expressed concern about the development of decentralised lending services and other DeFi-platforms, which could become the subject of the regulator’s scrutiny.
In April 2021, the US Senate approved Gensler’s nomination to head the SEC. Under Barack Obama’s administration, he served as Chairman of the CFTC and is remembered for his tough approach to regulation.
Previously, the official taught at the Massachusetts Institute of Technology and was a senior advisor to the MIT Media Lab initiative on digital currency.
Earlier in July, Gensler warned share-based token issuers to report to the SEC.
The SEC and its head Gary Gensler announced that there will be a number of measures for further control of cryptocurrency trading in the US. The main goal of the agency is to protect cryptocurrency investors and to stimulate the financial industry. All that could be achieved by smart regulation of the SEC, which is the main topic to be discussed today and in the near future.
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