SEC chief urges Bitcoin (BTC) exchanges to engage with the regulator

Fri 06 Aug 2021 ▪ 14h29 ▪ 3 min read — by Greg Hansen

In an interview with CNBC, Gary Gensler emphasised that the SEC’s role has not changed — the agency must protect both retail and institutional investors from fraud and manipulation, and the digital asset market is no exception.

Investor protection above all

The SEC is ready for a constructive dialogue with stakeholders, claimed Gesler. Speaking about the cryptocurrency market, he stressed the importance of protecting users of platforms offering services related to digital assets.

Gensler also noted that many Bitcoin exchanges and trading platforms are “in a borderline position” as they are likely dealing with unregistered securities.

“They need to reach out to us, establish a dialogue. A lot of them are trying to say, ‘You know, we’re not going to take the first step,'” he added.

The head of the agency said that “Bitcoin and hundreds of other coins” were a speculative asset class. He explained that the regulator was not against this situation, but that it was its duty to provide “basic protection” to investors.

“Squawk Box” host Andrew Sorkin remarked that regulation goes against the basic idea of Bitcoin. In response, Gensler praised the cryptocurrency’s “libertarian values” but noted the importance of supervision to prevent fraud and combat terrorism and other crimes. He cited the ransomware virus attack on the US fuel pipeline operator Colonial Pipeline as an example.

Earlier at the 2021 Aspen Security Forum, Gensler said the SEC was considering imposing a strict oversight regime on the industry. He stressed that he was neutral on the technology but did not hold neutrality on investor protection.

In July, Gensler warned issuers of stock tokens to report to the SEC.

In the same month, the official called for expanding investor protection rules to Bitcoin exchanges. The latter, he argued, should be regulated in line with the requirements for equity and derivatives markets.

Earlier in April, 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.

It’s been a tough week for cryptocurrencies as several public statements were made by SEC chairman outlining his firm conviction that the crypto ‘Wild West’ needs stronger investor protection. Looks like the topic of the crypto space regulation won’t be off the news anytime soon and you can only expect to hear a lot more about digital assets from the SEC in the future.

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Greg Hansen avatar
Greg Hansen

Trader de métier depuis 4 ans, j'aime l'analyse technique et les chiffres. Le virage crypto était donc une évidence.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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