SEC Chairman Gensler Presents Plans for Crypto Trading, Exchanges, Investor Protection, Bitcoin ETFs – Bitcoin News Settlement



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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler explained how the SEC plans to regulate the crypto industry. Focusing on investor protection, Gensler spoke about the SEC’s concerns about crypto trading, exchanges, loans, challenge platforms, and exchange-traded funds (ETFs).

Gary Gensler outlines SEC crypto priorities

SEC Chairman Gary Gensler presented the agency’s plans for cryptocurrency regulation at the Aspen Security Forum on Tuesday. He described:

Right now, we just don’t have enough crypto investor protection. Frankly, right now, it’s more like the Wild West. This asset class is rife with frauds, scams and abuse in some apps… If we don’t fix these issues, I’m afraid a lot of people will get hurt.

He explained, “There is a lot of hype and spin on how crypto assets work. In many cases, investors are unable to obtain rigorous, balanced and complete information.

Regulation of crypto platforms: Gensler says many offer unregistered securities

The SEC chairman explained that many tokens are offered and sold as securities. “I urged staff to continue to protect investors when selling unregistered securities,” he said.

Next, the president said he believed crypto trading platforms, lending platforms, and decentralized funding (challenge) platforms “may involve securities laws,” and in some commodity laws and banking laws as well.

He also pointed out that cryptocurrency trading platforms do not have the same investor protection as traditional exchanges, like the New York Stock Exchange (NYSE). In addition, he said that many foreign platforms allow US investors to trade cryptocurrencies using virtual private networks (VPNs), thereby bypassing regulations.

Gensler pointed out:

Make no mistake: as long as there are securities on these trading platforms, under our laws they must register with the Commission unless they meet an exemption… If a platform- form of loan offers securities, it also falls under the jurisdiction of the SEC.

Regulate investment vehicles with crypto exposure, Bitcoin ETFs

The President also touched on investment vehicles that provide exposure to crypto assets, including mutual funds that invest in bitcoin futures on the Chicago Mercantile Exchange (CME).

“I anticipate that there will be deposits relating to Exchange Traded Funds (ETFs) under the Investment Companies Act (Law 40). When combined with other federal securities laws, Bill 40 provides important protections for investors, ”Gensler said, adding:

Given these important protections, I look forward to the staff review of these deposits, especially if they are limited to those bitcoin futures contracts traded by CME.

Gensler also addressed the safekeeping of crypto assets, saying, “Custody protections are essential to prevent the theft of investor assets, and we will seek to maximize regulatory protections in this area.”

SEC needs more resources to protect investors

Gensler stressed that the SEC has pushed and will continue to push its “authorities as far as they go.”

He also asserted: “The test to determine whether a crypto asset is security is clear.” Nonetheless, he admitted that “there are loopholes” in the regulation of the crypto space, elaborating:

We need additional congressional authorities to prevent transactions, products, and platforms from falling between regulatory loopholes. We also need more resources to protect investors in this growing and volatile industry.

The former MIT blockchain professor then pointed out that the SEC was ready to work closely with Congress, the administration and other regulators around the world to oversee the crypto space. He nods:

In my opinion, the legislative priority should be focused on crypto trading, lending and challenge platforms. Regulators would benefit from additional plenary authority to write rules and attach safeguards to crypto trading and lending.

What do you think of Gensler’s comments on regulating the crypto industry? Let us know in the comments section below.

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