In a recent interview, it’s been confirmed that Gary Gensler – the head of the Securities and Exchange Commission (SEC) – is looking to regulate cryptocurrency exchanges.
Gary Gensler Is Looking at Crypto Exchanges… Again
A discussion of the matter was recently held by Jennifer Schonberger, a reporter who had specific details into the ideas of Gensler and his agency. She commented that he is looking to separate all market makers and subject them to the same financial rules as standard investment platforms. She said:
SEC chair Gary Gensler is looking into how the agency could regulate crypto trading exchanges. He says that crypto trading platforms and tokens are similar to trading securities and should be regulated in a similar way to traditional securities that trade on exchanges. Gensler said, quote, ‘Any token that is a security must play by the same market integrity rule book as other securities under our laws. There is no reason to treat the crypto market differently just because of different technology.’
On one hand, Gensler has appeared quite open to crypto given that he is the first regulatory figure to bring a bitcoin-based exchange-traded fund (ETF) to the space. The product was initially introduced by a company called Pro Shares and was approved by Gensler late last year.
But while the tool is considered a revolutionary step forward in the world of digital assets, it has garnered some criticism given that it is not backed by physical bitcoins but rather by futures, which are considered weak technology by comparison. They also allegedly cut traders out of earning all available profits.
Gensler says cryptocurrency exchanges could act as money makers in the sense that they could have separate accounts on the other end of the spectrum of their customers’. He believes that if exchanges operate in this way, they may have to be treated separately from other platforms.
He commented:
We already have robust ways to protect investors trading on platforms. We ought to apply these same protections in the crypto markets.
Gensler has also proposed possibly imposing some of the same insurance measures for crypto customers that are also applied to traders on traditional investing sites and platforms, though it’s not likely these measures will be implemented given that several crypto exchanges see millions of retail customers buying and selling assets without the assistance of a broker through these companies.
Could the CFTC Help?
He is calling for oversight into various crypto platforms that allow both commodity tokens and crypto security tokens to be traded. For this to occur, the SEC would have to obtain assistance from the Commodities Futures Trading Commission (CFTC) to look in on the assets that don’t fall under the jurisdiction of the former agency.
Gensler is also working with crypto trading platforms to convince them to fully register with organizations like the CFTC.
