Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC) has said that his agency will endorse Congress’ bid to have cryptocurrencies regulated.
Gensler added that the SEC will work with the Commodity Futures Trading Commission (CFTC) to rein in digital tokens amplifying, his calls for greater oversight of the non-security tokens and related intermediaries.
Gensler while speaking at the SECSpeaks Conference, said a lot has to be done concerning the oversight and regulation of cryptocurrency, pledging to back the CFTC and Congress to regulate the digital asset market, whose markets have plunged in recent months.
“Let’s ensure that we don’t inadvertently undermine securities laws underlying $100 trillion capital markets,” he said. “The securities laws have made our capital markets the envy of the world.”
SEC wants to protect investors trading on platforms.
His remarks suggested the security regulators’ talks are ripe and are determined to safeguard the market integrity, protect against fraud and manipulation, and facilitate capital formation.
“In my view, regulation both protects investors and promotes investor confidence, in the same way that traffic laws protect drivers and promote driver confidence. It’s at the core of what makes markets work.”
As of now, the regulators have no power to regulate the financial market of crypto until Congress passes an act that will give them the mandate to formulate standards for digital payments reliant on cryptocurrencies which have been more vulnerable to disruptions resulting in consumers losing funds and becoming victims of fraud or unable to recover the money.
Rostin Behnam, Commodity Futures Trading Commission Chairman, requested Congress to hand out a law that would let regulators control digital assets and offer financial support to oversee the market. Leaders of the Senate Banking Committee, which has jurisdiction over banking law, led by Senator Elizabeth Warren, also asked SEC and other regulators to move fast in designing rules that protect investors, customers, and markets, and rules that they compete on a level playing field with conventional financial establishments.
Securities laws have regulatory loopholes on cryptocurrency
If Congress comes forth with a law on crypto, it will be a big step in the acceptance of crypto and will provide a route for officials’ approval as an essential foundation for financial and economic activity in the coming decade.
Market movers have taken to social media to react to the developments, with the CEO of FTX commending the effort of the regulators.
“NOT LEGAL ADVICE, but I do think that having a federally regulated spot market would go a long way!” tweeted SBF FTX
Currently, the SEC administers solely traded securities and is seeking to consider how best to record and control platforms where the trading of securities and non-securities is intertwined and those that are administered by CFTC and will jointly address platforms that might trade both crypto-based security tokens and some commodity tokens, using our respective authorities.
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