Gary Gensler, chairman of SEC, constantly seeks the corporation of crypto firms to initiate crypto regulations that will provide a fair market environment for investors to thrive. He argues that with efficient collaboration, the crypto space will become a haven for investors.
Why Gary Gensler Beckons on Crypto Firms for Crypto Regulation
The U.S. Securities and Exchange Commission chairman—Gary Gensler—beckons on crypto firms that have securities as part of their projects to register with the commission. He believes this will protect investors from losing their money to the innovative technology.
In his statement to the Senate Committee on Banking Housing and Urban Affairs on Sept. 14, he mentioned that the commission collaborates with the Commodities Futures Trading Commission to create crypto regulations to protect investors in the crypto market.
Gensler opined that innovations such as crypto might only bring developmental changes to the financial sector if done within a legal framework with precise regulations. He said,
“To the extent that there are securities on these trading platforms, under our laws, they have to register with the Commission unless they qualify for an exemption.”
He mentioned this while urging crypto firms to work collectively with regulators while providing investor protection in cryptocurrency finance, issuance, and trading. He revealed that it might negatively impact the financial sector like the Wild West before securities laws were established.
How Crypto May Affect Financial Market Outside of Regulatory Framework
Sam Bankman—CEO of FTX, a crypto exchange—argues that there are expectations from the governments to establish crypto regulation policies in about three to five years. He believes that it is appropriate for groups to obtain licenses across jurisdictions to safeguard crypto investors’ funds.
While establishing his desire to be part of the discourse, he revealed that his exchange doesn’t see Tether (USDT) equivalent to the U.S. dollar in the one-to-one possibility. He believes that users’ impact on the crypto market will determine that.
However, he denied any publication stating that USDT should be segregated from U.S. dollar price. He believes there is a government framework that makes it easy for USDT to assume that stance. Likewise, Gary believes that a robust legal framework will guide exchanges in the crypto market.
Can Robust Crypto Regulation Help the US Financial Market?
Gary Gensler—Chairman of the U.S. SEC—looks forward to creating protection laws in crypto. These crypto regulations will protect the investors or users from possible fraud and illicit activities against the country’s economic interests.
Gary believes that a nation has to protect its citizens despite proclamation from groups or individuals within and out of the country. In his interview with Bloomberg, he mentioned that the commission monitors seven crypto-related policies, including decentralized finance (DeFi), stablecoins, and token offerings.
While crypto regulation may help SEC to achieve its fair economic market goal, he recognized how DeFi players might have enormous intake in this regard. Likewise, he mentioned that the crypto lending market is monitored too.
Despite Gary’s intense push to introduce crypto regulations across the nation, the SEC is not making it a priority as many other important policy issues should be tended to on the SEC table.
How Does SEC Intend to Protect Crypto Investors?
The establishment of crypto regulation is becoming a burning debate across the executive and legislative levels. Senators and top executives keep demanding protection for crypto investors. One of the outspoken senators is Sen. Elizabeth Warren, a former U.S. presidential aspirant.
She believes that investors are bound to lose their money to innovative flick without efficient regulations in the crypto space across the nation. Sometimes around July, she sent queries to the SEC Chairman demanding answers to the SEC’s involvement in crypto regulation. In her statement, she said that
“These regulatory gaps endanger consumers and investors and undermine the safety of our financial markets. The SEC must use its full authority to address these risks, and Congress must also step up to close these regulatory gaps.”
This statement was part of her demand to understand if the SEC regulates the crypto space to reduce investment risks and create an equitable investment market space. Based on Warren’s claim, she believes that Gary’s answers to her questions will help clear the air sabout providing protections for investors through crypto regulation.
Warren is an anti-crypto executive, and she won’t stop sharing her sentiments about the state of crypto and the kind of investment she considers it to be. Janet Yellen—Secretary of the U.S. Treasury Department—is also another known critics of cryptocurrency.
Is Crypto Regulation Inevitable?
Considering the level of illegal activities—such as money laundering and fraud—going on in the crypto world, it is imminent that governments establish crypto regulation. These regulatory policies will not only protect the investor funds. It will also see the creation of fair financial markets, which has always been the commission’s goal.