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Securities and Exchange Commission chairman Gary Gensler said Tuesday that Wall Street’s top regulator needs to give Congress additional powers to oversee a huge and ever-evolving cryptocurrency market.
Speaking about crypto at the Aspen Security Forum, Gensler said the SEC has “taken our agencies as far as possible and will continue to lead them.”
“Certain rules regarding crypto assets are well regulated. The test to determine if a crypto-asset is a security is clear, “he said. “There are some loopholes in this area, however: We need additional congressional agencies to keep transactions, products and platforms from getting caught in regulatory loopholes. We also need more resources to protect investors in this growing and volatile sector.”
Gensler, who previously taught courses on blockchain and other financial technologies at the Massachusetts Institute of Technology, has asked lawmakers to give his agency legal authority to oversee crypto exchanges.
He said many of the crypto coins would be traded like assets and should fall under the purview of the SEC, which already has significant authority over digital assets.
Despite his deep knowledge of blockchain and cryptocurrencies, Gensler has made it clear that he wants to take a hands-on approach to new financial technologies. Capitol Hill has held hearings for months on how best to monitor the emerging market, now worth trillions, amid sharp price fluctuations and rapid growth.
Senator Elizabeth Warren, for example, wrote to Treasury Secretary Janet Yellen last week urging them to step up their oversight efforts.
Warren, a member of the Senate Banking Committee and longtime critic of the country’s largest banks, urged the Treasury Secretary to use her powers on the Financial Stability Oversight Council to create a more secure crypto market.
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“The FSOC must act quickly to use its legal powers to address cryptocurrency risks and regulate the market to ensure the safety and stability of consumers and our financial system,” the Massachusetts Democrat wrote in a letter to Yellen . “As the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, consumers, the environment and our financial system are exposed to increasing threats,” she added.
The main concerns of regulators about crypto are its vulnerability to fraud and market manipulation.
The Federal Trade Commission reported earlier this year that consumers lost more than $ 80 million to crypto scams between October and March, with many of those losses attributable to sneaky scammers targeting retail investors on social media, the said FTC with.
“The American public buys, sells, and lends crypto for these trading, credit, and DeFi [decentralized finance] Platforms, and there are significant gaps in investor protection, “said Gensler.” Make no mistake: if there are securities on these trading platforms, our laws require them to register with the Commission, unless they meet an exemption. Make no mistake: if a lending platform offers securities, it also falls under the jurisdiction of the SEC. “
Gensler didn’t comment on Tuesday on the potential for approval of an exchange-traded Bitcoin fund, a pending decision that many in the crypto market are eagerly awaiting.
Investors are closely monitoring the status of a request by VanEck to list shares of its Bitcoin Trust on the BTZ Exchange of the Chicago Board of Exchange. Regulators said in a letter dated June 16 that they would take additional time to seek comments from the public.
Bitcoin was last traded at $ 38,200 but has been volatile in recent months, falling below $ 30,000 in late July.
Republican SEC Commissioner Hester Peirce, known for advocating for a little easier regulation of digital assets, told CNBC last month that she was frustrated with how slowly the regulator approved such an ETF.
Rejecting Bitcoin ETF applications not only carries the risk of double standards, it can also provide few, more dangerous alternatives to thousands of investors, Peirce said.
“The Complications of Not Approval [an application] get stronger because people are looking for other ways to do the same things that they would do with an exchange traded product, “she said.” They are looking for other types of products that are not that easy to get in and out of maybe look at companies that are somehow related to bitcoin or crypto in a broader sense. “