The U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler stated the importance of how crypto market participants should operate within the bounds of the law.
Gary Gensler states, “Very few, if any, are registered with the SEC and fully compliant with the federal securities laws.”
The SEC chair says the noncompliance jeopardizes the investments of investors as they are not provided with basic information on the crypto assets themselves, and how the firms carry out their trades.
Gensler emphasized that cryptocurrency intermediaries should set up their companies in a way that complies with the regulations that apply to securities exchanges, broker-dealers, and clearinghouses.
He also noted the firms should also implement policies that guard against manipulation and fraud, and make the necessary disclosures.
Cryptocurrency middlemen aren’t registering with the SEC or trying to abide by the legislation passed by Congress, says Gensler.
The SEC chair added that finding noncompliance through investigations and enforcement measures is one of the options in their repertoire.
More than 100 lawsuits against cryptocurrency intermediaries and token issuers have been successfully brought by the SEC, including complaints against FTX, Terraform Labs, its founders, etc.
Also Read: SEC Convicts FTX’S Former Chief Eng to Criminal Charge
Gensler says some have criticized the SEC for filing lawsuits and conducting investigations against crypto firms, hindering them from flourishing abroad. He even noted most of the crypto tokens are likely to be securities.
“But forsaking investor protection puts real people’s life savings at risk. Enforcement is a tool, not the destination. The goal is to get market participants into compliance with laws and rules and to protect our “clients”: U.S. investors,” the SEC chair stated.
Gensler is particular about one thing “Crypto firms should do their work within the bounds of the law, or they shouldn’t do it at all.”
The crypto community questioned the intention of the chairman by asking how exactly will the regulators protect the investors if they are not enabling users to access their own funds from the beleaguered crypto firms.
While some agree with the need for stricter crypto regulations but are unable to pick a side because the whole point of the sector is financial privacy and decentralization.
