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Next Capital Chairman David Tawil discusses the cryptocurrency policy of SEC Chairman Gary Gensler and the City of Miami’s acceptance of $ 5 million in funds from proprietary crypto the city.
Securities and Exchange Commission Chairman Gary Gensler said on Tuesday that he did not see much long-term viability for cryptocurrencies, stressing the importance of protecting investors in the market and putting it under scrutiny. regulatory oversight.
SEC PRESIDENT WARNS CRYPTOCURRENCY INDUSTRY WILL NOT REACH POTENTIAL TO STAY OUTSIDE OUR LAWS
Mr. Gensler compared the thousands of cryptocurrencies in existence to the so-called savage banking era that took hold in the United States from 1837 to 1863 in the absence of federal banking regulation. Before President Abraham Lincoln established the Office of the Comptroller of the Currency, banks issued their own currencies, which they sometimes refused to redeem for their purported value in gold or silver.
“I don’t think there is long-term viability for five or six thousand forms of private money,” Gensler said at a virtual event hosted by The Washington Post. “In the meantime, I think it’s worth having an investor protection regime around this.”
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Mr Gensler, who took office in April, previously taught a cryptocurrency course at the Massachusetts Institute of Technology, giving some industry participants hope that he would be a friendly regulator. Instead, he has repeatedly compared the crypto market to the Wild West and urged crypto trading and lending platforms to register with the SEC, saying they likely offer unregistered securities. in violation of federal law.
Sources told FOX Business’s Charlie Gasparino that there could be a standoff between Treasury Secretary Janice Yellen and SEC chief Gary Gensler.
On Tuesday, he tackled stablecoins, a rapidly growing segment of the crypto market that has come under increased scrutiny from regulators in recent months. These tokens, including Tether, USD Coin, and Binance USD, are pegged at a one-to-one ratio to the dollar and say they are backed by high quality assets. They are mainly used to trade other cryptocurrencies.
“We have a lot of casinos here in the Old West, and poker chips are those stablecoins at casino gaming tables,” Gensler said. He said stablecoins often have aspects of both SEC-regulated investment contracts and banking products, but federal bank regulators don’t have all the authorities they need to oversee them.
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In separate remarks on Tuesday, Acting Currency Controller Michael Hsu said on Tuesday that the crypto industry is on a path that resembles that of credit derivatives before the 2008 financial crisis. He expressed doubts about it. the fact that the cryptocurrency is meeting its goal of promoting financial inclusion and has criticized crypto instruments that promise stable returns to investors for failing to explain how those returns are generated.
“I saw a fool’s gold rush up close before the 2008 financial crisis,” Hsu said in remarks to the Blockchain Association, a crypto lobbying group. “It feels like we may be on the verge of another with cryptocurrencies and decentralized finance.”
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