The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, says that cryptocurrency “is not going to end well if it stays outside the regulatory space.” The SEC has been criticized for taking an enforcement-centric approach to regulating the crypto industry.
SEC Chair Says Crypto Will Not End Well Staying Outside Regulations
SEC Chairman Gary Gensler talked about cryptocurrency regulation Monday during an interview with former federal prosecutor Preet Bharara at Code Conference in Beverly Hills, California.
He explained that the crypto sector in the U.S. has many “trading venues and lending venues” with “not just dozens but hundreds and sometimes thousands of tokens on them.” Noting that “people will be hurt” if cryptocurrency markets are allowed to operate outside the purview of regulators, the SEC chairman warned:
This is not going to end well if it stays outside the regulatory space.
“To think that a field that’s grown 10-fold in the last 18 months — not just in terms of asset value, but in the underlying lending and much more — that it’s going to stay outside of these public policy frameworks and succeed,” he continued. “We’ll end up with a problem and a lot of people will be hurt.”
In August, Gensler said that the cryptocurrency field is not going to reach any of its potential if it tries to stay outside of the SEC’s laws. Last week, former U.S. Treasury Secretary Larry Summers also said that cryptocurrency will do better regulated rather than being treated like a libertarian paradise.
The SEC chairman said at a Senate Banking Committee hearing last week that a number of cryptocurrency platforms, including the Nasdaq-listed Coinbase, have many tokens listed, insisting that some of them must be securities. He added that the SEC needs more manpower and funding to better regulate the crypto sector.
He said, “Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” asserting that the crypto industry is “more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.”
However, some people criticize the SEC for taking an enforcement-centric approach to crypto regulation, including SEC Commissioner Hester Peirce. Last week, Senator Pat Toomey wrote a letter to Gensler asking for clarity on crypto regulation.
What do you think about SEC Chairman Gary Gensler’s comments on crypto? Let us know in the comments section below.