The Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has released a video explaining how the agency plans to regulate cryptocurrency exchanges. “I have asked our employees to work directly with the platforms for their registration and regulation,” the SEC chief revealed.
Securities and Exchange Commission Chairman Gary Gensler’s video on regulating cryptocurrency exchanges
SEC Chairman Gary Gensler posted a video Thursday explaining how the SEC plans to regulate cryptocurrency exchanges and protect investors.
In the video, Gensler explained the similarities and differences between cryptocurrency trading platforms and traditional exchanges such as the New York Stock Exchange (NYSE). “When you trade the stock market, you have some protection,” he began, adding that investors are “protected from fraud, manipulation, manipulation, and the like.”
Noting that crypto platforms serve “millions, sometimes tens of millions” of retail customers who buy and sell crypto assets directly without going through an intermediary, the SEC chief explained: “With so many retail clients trading on crypto platforms, they should We make sure that these platforms offer protection similar to ‘traditional security’ platforms. he added:
So I have asked our employees to work directly with the platforms to register and regulate them to ensure that these tokens also come in and are registered as securities where appropriate.
“Imagine delivering all of your inventory to the New York Stock Exchange, that would never fly,” he noted, reiterating: “And so, I asked employees how to work with the platforms to ensure your assets are better protected.”
Then Gensler brought up another risk factor inherent in cryptocurrency exchanges. “Unlike traditional stock exchanges, cryptocurrency exchanges may also act as market makers,” he said. “When you sell your tokens, you may actually buy one of the platforms on the other side,” the SEC head emphasized, explaining:
Exchanges don’t, they don’t act as market makers because that creates an inherent conflict of interest.
“So again, I asked the staff to consider whether it would be appropriate to separate market-making functions on these crypto platforms,” he said.
In conclusion, the SEC chairman emphasized: “There is no reason to treat the cryptocurrency market differently just by using a different technology. It would be like saying electric car drivers don’t need seat belts because they don’t use gas.”
He also tweeted on Thursday: “We have rules in place in our capital markets to protect market integrity and protect against fraud and manipulation. If a company builds a crypto marketplace that protects investors and meets the standards of our market regulations, people are more likely to have greater confidence in this market.”
Gensler’s video received some criticism on Twitter. Some people accuse Gensler of spending time and resources promoting himself rather than doing his job regulating the crypto sector. Others have criticized the Securities and Exchange Commission for using an enforcement-focused approach to regulate crypto assets.
Congressman Bill Huizinga (R-Michigan) tweeted to Gensler, “The SEC should stop using regulations through enforcement to provide ‘clarity’ to the market,” explaining:
No exchange would want to “enter and register” without knowing these market regulations.
Last week, the regulator indicted a former Coinbase employee in an insider trading case, designating nine crypto tokens as securities in the process.
What do you think of the video presented by SEC President Gary Gensler on regulating cryptocurrency exchanges? Let us know in the comments section below.
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