Securities and Exchange Commission (SEC) Chairman Gary Gensler is looking to establish a robust cryptocurrency regulatory framework.
In an interview with Bloomberg, Gensler emphasized that his knowledge of cryptocurrencies would not preclude him from regulating them thoroughly. Gensler said he is “neutral on,” but “intrigued,” by cryptocurrencies, but that he’s “not neutral about investor protection.”
Although individuals are free to make their own investment decisions, Gensler stressed that the SEC had a responsibility to protect them from fraud. While acknowledging that the SEC already has broad authority, Gensler asked Congress to give the agency legal authority to monitor crypto exchanges.
Crypto regulatory framework
Gensler remarked that technology has sparked economic progress throughout human history. He also sees this kind of potential from digital assets. However, he noted that the automobile industry didn’t fully take off until government regulations made driving safe enough for everyday use. Similarly, he says that the technology’s broader adoption depends on “bringing things inside.”
SEC Commissioner Hester Peirce has been a longtime advocate for cryptocurrencies and blockchain technology. She also feels that regulation will provide the clarity that many crypto investors are seeking. “A lot of people just want more clarity,” she says. “Society needs to have that discussion about what is the right regulatory framework.”
Although Peirce also feels it’s “high time” the SEC approved a bitcoin exchange-traded fund (ETF), Gensler is in no rush. In fact, Bitcoin and cryptocurrency-related issues are probably not high priorities among 49 non-crypto policy reviews. Others have speculated that he wants to use the ETF applications as a means of getting more control over crypto exchanges. For his part, Gensler said that he thinks regulating crypto exchanges would be the easiest way for the government to manage digital token trading.
Gensler also expressed concern over peer-to-peer lending on so-called decentralized finance (DeFi) platforms. If firms advertise a specific interest-rate return on a crypto asset, Gensler says this could bring the loans under SEC oversight. If platforms that pool digital assets are seen as akin to mutual funds, the SEC could potentially regulate them.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.