SEC Chairman Gary Gensler spoke recently on the ever-changing topic of cryptocurrencies and claimed that crypto platforms need regulations if they’re going to last.
The head of the U.S. Securities and Exchange Commission said he is disappointed with the reaction to his crypto proposals. Gensler warns that crypto exchanges put their own survival at risk if they do not work within regulations.
Gensler told the Financial Times he is “technology-neutral.” He said crypto assets are not special in terms of public policies for investor protection and preventing illicit activity. “At about $2tn of value worldwide, it’s at the level and the nature that if it’s going to have any relevance five and 10 years from now, it’s going to be within a public policy framework,” he said.
The chairman said that finance is ultimately about trust. Therefore he revealed disappointment with the crypto industry’s reaction to his suggestion of registration with the SEC. He hinted compliance and communication are better than, “begging for forgiveness.”
“Talk to us, come in,” he said. “There are a lot of platforms that are in operation today that would do better engaging.”
Earlier this month, Gensler clarified that DeFi projects are not exempt from regulations. The decentralized financial platforms pose a challenge due to the lack of a traditional broker. However, Gensler said they still have “a fair amount of centralization.”
Crypto regulations pile up
At the beginning of August, the Senate ushered through a bill with the potential for a cryptocurrency industry upset. It opened up the definition of a broker, which then included almost every actor within the sector. It broadened the reporting requirements so much that potentially a cup of coffee purchased with bitcoin could need tax reporting.
For lawmakers, this is an opportunity for revenue to fund such hefty bills. However, for the crypto industry at large, this is not a welcomed development. Many say that this is a pivotal moment for the industry and further innovation. Nonetheless, regulators vowed for some type of crypto taxation in place by the end of September.
In addition, the U.S. Treasury said earlier this week it encourages global data sharing for crypto companies. This is in an effort for a more watchful eye on U.S. taxpayers evading the system through offshore accounts.
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