The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, explained that there is not enough investor protection in cryptocurrency. He added that the securities regulator needs more funding and manpower to effectively regulate the crypto sector.
SEC Chairman Gary Gensler detailed his agency’s approach to regulating cryptocurrencies before the Senate Banking Committee Tuesday. He assured senators that the SEC is working overtime to create a regulatory framework for crypto assets.
Noting the enormity of the task, he told Senator Catherine Cortez Masto that the SEC could use “a lot more people” to evaluate the 6,000 digital “projects” and determine whether they are securities under the U.S. securities law. He said:
Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending. Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.
Senator Pat Toomey, the committee’s ranking member, pressed Gensler over whether stablecoins meet the definition of securities. He emphasized:
I think we need clarity on this. I think you should publicly disclose this … And we certainly shouldn’t be taking enforcement action against somebody without having first provided that clarity.
Gensler has insisted that the rules on cryptocurrencies are clear. “We have a set of investor protection laws in this country … that was laid out in the 1930s where Congress wanted to protect the public against fraud and other bad actors … I think the laws [on cryptocurrencies] are clear,” he told CNBC Wednesday. “The case law, the Supreme Court’s weighed in on this multiple times and that many of these tokens do come under the securities laws.”
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