Gary Gensler, the Chairman of the US Securities Exchange Commission (SEC), yesterday informed that the regulator is working tirelessly to create crypto rules. Speaking to the Senate Banking Committee, Gensler said the SEC is trying to create a set of regulations that supervise the volatile crypto market while considering the interests of American innovators.
According to Gensler, the watchdog seeks to introduce adequate investor protections by introducing better policies for the thousands of cryptos that have cropped up, as well as renowned coins like Bitcoin (BTC) and Ether (ETH). However, he was quick to note that while the SEC is working rapidly to regulate the burgeoning asset class, the task at hand is enormous. To this end, he informed Senator Catherine Cortez that the agency could use a larger task force.
He pointed out that a large task force would be elemental in evaluating 6,000 novel digital projects and determine whether they qualify as securities under US law.
In a prepared speech, Gensler 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.”
The SEC should act swiftly
While Gensler tried to convince the Senate Banking Committee that the SEC is doing the best it can, some lawmakers still felt the exchange can do better. According to them, the current opaque definitions and an uncertain marketplace foster speculation while suppressing innovation.
For instance, Senator Pat Toomey, a Pennsylvania Republican and the committee’s ranking member pushed Gensler to point out whether stablecoins meet the definition of a security, seeing as investors don’t expect investments in such coins to return profits. Toomey further demanded that Gensler offer more clarity on the matter, saying the SEC Chair should publicly share an official stance. He added that the SEC should not be taking enforcement action against anyone without providing clarity.
Senator Mark Warner said he shares Gensler’s concerns about crypto. However, he noted that he has done quite well financially because of innovation, and he supports the crypto space. However, he emphasized that the SEC has to offer some direction and guidance.
Investors also demand clear crypto regulations
This news comes after the SEC said it would sue Coinbase if the exchange proceeds to launch its lending product dubbed Coinbase Lend. Commenting on the SEC’s move, Kevin O’Leary, a renowned Canadian investor that stars in the Television series Shark Tank, said it was a slow-down in what is emerging as an interesting industry. He also said that investors want regulators to make some decisions about crypto.
According to him, the people in the financial services industry don’t want to be cowboys about crypto. Indicating that a lot of investors are waiting for a go-ahead by regulators, O’Leary said he would not want to get involved with crypto if watchdogs say it is not okay.