Gary Gensler, the Chairman of the U.S. Securities Exchange Commission (SEC), has been under fire lately for making it more complex and difficult for cryptocurrencies to enter the mainstream. But in a recent interview with CNBC’s Squawk Box, Gensler defended the regulator’s interventions and explained that the SEC’s aim is to protect investors by ensuring market participants comply with regulations.
Why does the SEC regulate cryptocurrencies?
The cryptocurrency field requires “proven rules and laws” in order to protect investors, says Gensler. He stressed the importance of technology-neutral regulation and pointed out that the goal of his organization is to have a neutral stance on the technology being used. The SEC chairman also mentioned that “full, fair, and truthful public disclosure” is necessary to address conflicts and disorganize the clustered businesses in the crypto sector.
The SEC’s crackdown on staking industry:
Recently, the SEC launched another assault on the cryptocurrency market by targeting the staking industry. The Commission reached an agreement with the cryptocurrency platform Kraken, which ended its staking operations. According to Gensler, Kraken was not following the law and the deal was part of the “basic bargain” with the SEC. He noted that the exchange did not implement full, fair and truthful disclosure measures.
Why is the SEC tough on cryptocurrency platforms?
American regulators have been skeptical of cryptocurrencies for a long time and have now toughened up their discourse with regard to crypto exchange platforms. The SEC Chairman has always criticized cryptocurrency platforms for offering multiple services that often conflict with each other. As a result, the SEC has launched lawsuits against several cryptocurrency platforms for having illegally raised billions of dollars from hundreds of thousands of American investors. The Kraken exchange platform was fined $30 million for offering a staking program to its American customers without having registered it, and the Genesis and Gemini platforms are now being sued by the SEC for illegally raising billions of dollars from hundreds of thousands of American investors.
The SEC’s priorities in 2023:
In 2022, the cryptocurrency sector witnessed a fall in the market and the bankruptcy of many trading platforms, including FTX. The SEC has now made cryptocurrencies its priority in 2023 and has a shock treatment planned for the crypto sector. Trading platforms and all players in the crypto sector are in the sights of the SEC, which requires them to comply with laws and regulations in force and observe risk management. The SEC also wants increased control over customer assets, oversight of advertising, and review of cybersecurity practices to prevent attacks.
Gensler’s commitment to better regulation:
Reaffirming his firm commitment to better regulate the crypto industry, Gensler said that the examination division of the SEC will continue to protect investors and help ensure compliance with federal securities laws by executing the 2023 priorities.
Gary Gensler, the Chairman of the U.S. Securities Exchange Commission, is on a mission to regulate the crypto industry and protect investors. The SEC is tough on cryptocurrency platforms because they offer multiple services that often conflict with each other, and the regulator wants to ensure compliance with the laws and regulations in force. The year 2023 is crucial for the crypto sector, as the SEC has made it its priority and has a shock treatment planned for the industry. The SEC wants increased control over customer assets, oversight of advertising, and review of cybersecurity practices to prevent attacks. Gensler is committed to better regulating the crypto industry and ensuring compliance with federal securities laws.