SEC Chairman Announces Outline Plan to Regulate Crypto Exchanges

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2022-08-01 13:58:40

US Securities and Exchange Commission (SEC) Chairman Gary Gensler recently published a video explaining his plans to regulate cryptocurrency exchanges.

The SEC director revealed: “I have asked our employees to work directly with the platforms to get them registered and regulated.”

SEC Chairman’s Outline to Regulate Cryptocurrency Exchanges

On Thursday (July 28), Gary Gensler – Chairman of the US Securities and Exchange Commission (SEC) released a video explaining briefly how the agency will regulate cryptocurrency exchanges. electronics and investor protection.

Mr. Gary pointed out the similarities and differences between cryptocurrency trading platforms and traditional exchanges (such as the New York Stock Exchange – NYSE).

“When you trade in the stock market, you have certain safeguards,” – “protected against fraud, manipulation, poaching, and the like.”

Gary noted that crypto platforms serve “millions, sometimes tens of millions” of individual customers who directly buy and sell crypto assets without going through a broker:

“With so many retail customers trading on crypto platforms, we should make sure those platforms offer the same protections” as traditional security platforms. So I asked our staff to work directly with the platforms to register and manage them to ensure that those cryptocurrencies also appear and register in the appropriate places such as certificates. securities.”

He continued:

“Imagine giving all your shares to the New York Stock Exchange, that will never fly,” noted Gary, repeating: “So I asked the staff how to work with the stock exchanges. platform to best ensure your assets are protected.”

Gensler then introduces another element of risk inherent to crypto exchanges. “Unlike traditional stock exchanges, cryptocurrency trading platforms can also act as market makers,” he describes. “When you sell your coin or token, one of the platforms might actually be buying on the other side,”

The SEC Chairman described that stock exchanges do not act as private market makers because that creates an inherent conflict of interest: “So again, I asked members consider whether it is appropriate to separate market-making functions on these crypto platforms,” he said.

Concluding, the SEC Chairman emphasized:

“There is no reason to treat the crypto market differently just because a different technology is used. That’s like saying electric car drivers don’t need to wear seat belts because they don’t use gas.”

See details video of SEC Chairman

He also tweeted on Thursday: “We have rules in place in our capital markets to protect market integrity and guard against fraud & manipulation. If a company builds a crypto market that protects investors and meets the standard of our market regulations, people will have more confidence in that market. “

Gensler’s video received some criticism on Twitter. Some accuse Gensler of spending time and resources promoting himself rather than doing the job of regulating the crypto sector. Others have criticized the SEC for using an enforcement-focused approach to regulating crypto assets.

Congressman Bill Huizenga (R-MI) tweeted to Gensler, “The SEC should stop using regulation by enforcement to provide ‘clarity’ in the market,” stating:

No exchange wants to ‘join and sign up’ without knowing what those market regulations are.

Last week, the SEC charged a former Coinbase employee with insider trading, with nine tokens allegedly being “security.”

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