In his first major digital money interview, the new chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, hinted that he would not take a careless approach to regulating cryptocurrencies.
Officials around the world are in the process of figuring out how to regulate the $1.6 trillion cryptocurrency market, which has seen huge growth and fluctuations.
Mr. Gensler is in favour of a robust regulatory framework based on consolidating security cushions for the millions of investors who have filled their portfolios with cryptocurrencies.
“If someone wants to speculate, that’s their choice, but our role as a state is to protect investors from fraud,” said Gensler, who will address the third session on cryptocurrencies at the Aspen Security Forum.
Mr. Gensler has called on Congress to pass legislation that would give the service jurisdiction to oversee cryptocurrency exchanges, but said the SEC’s powers were already quite extensive. There has been a lot of discussion in recent years about what kind of digital assets fall under the jurisdiction of the SEC. Some like bitcoin, which function as currencies, are considered commodities, not securities, but there are still thousands of currencies, which according to Gensler are essentially unregistered securities that must comply with SEC rules.
Mr. Gensler did not comment on whether an ETF should be approved for bitcoin, a decision that many cryptocurrency advocates have been waiting for. So far, the SEC has not given the “green light” for the creation of such funds, citing concerns about the risk of fraud and manipulation of the bitcoin market.
He said setting up cryptocurrency exchanges was the easiest way for the government to quickly gain control of cryptocurrency trading. He added that he was concerned about peer-to-peer lending on DeFi platforms.