Gary Gensler, the newly appointed chairman of the US Securities and Exchange Commission, has asked the US Congress to make some important decisions regarding the regulation of cryptocurrency.
The SEC chairman brought this up during a House Financial Service Committee hearing that discussed market volatility related to the GameStop share price surge observed earlier this year.
Gensler made such comments in response to a question from Rep. Patrick McHenry about what the SEC would do to ensure the crypto industry was compliant and with legitimate use cases.
Gensler responded that US investors have no protection when trading bitcoin on crypto exchanges. He therefore called on the US Congress to consider increasing investor protection for crypto exchanges.
Gensler stated that crypto exchanges do not have a regulatory framework set up by the SEC or the Commodity Futures Trading Commission (CFTC) Was the US Congress responsible for creating greater investor confidence by regulating crypto exchanges.
Although the SEC’s agency includes the regulation of digital assets that are considered securities by the regulator, bitcoin does not fall under this category.
Gensler stated that Bitcoin is a commodity under US law and is not subject to SEC supervision. He said:
“The SEC currently has great authority over securities, and there are a number of cryptocurrencies that fall under that jurisdiction. However, there are some areas, particularly Bitcoin trading on major exchanges, that the public is not really protected right now. ”
According to Gensler, there is no protection against manipulation or fraud without strict supervision of the market regulation on crypto exchanges. He said the $ 2 trillion crypto market could benefit from better investor protection, so he suggested that Congress play an active role in creating greater regulatory clarity, particularly on exchanges. Gensler said:
“Only Congress can really deal with it. It would be good to consider whether the crypto exchanges should receive better investor protection. ”
Regarding the GameStop frenzy, Gensler spoke about the role of online communities like Reddit in boosting stock prices. However, he stated that he was not interested in restricting freedom of expression, but rather was interested in whether malicious actors were taking advantage of such communities to manipulate markets.
He announced that the SEC plans to release a report this summer evaluating the GameStop trafficking craze and the response to it.
Closing gaps in the crypto industry
Gensler was sworn in as chairman of the SEC last month. During his nomination, he suggested that further government oversight of crypto assets would come. His appointment could have a significant impact on the cryptocurrency industry. Crypto proponents have predicted that under his leadership, the US could see Bitcoin ETF approval and much-needed regulatory clarity in the digital asset space.
As a former chairman of the Commodity Futures Trading Commission and a former investment banker of Goldman Sachs, Gensler has a wealth of experience as chairman of the SEC. What sets it apart from its predecessors is that Gensler is the first blockchain technology and crypto expert to head the SEC. He was a professor and taught the Blockchain and Money course at the MIT Sloan School of Management. He sees Bitcoin as a “catalyst for change”.
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