SEC Chairman Releases Video Plan to Regulate Crypto Trading Platforms – Bitcoin News Regulation

SEC Chairman Releases Video Plan to Regulate Crypto Trading Platforms – Bitcoin News Regulation

The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, released a video explaining how the agency plans to regulate cryptocurrency exchanges. “I have asked our staff to work directly with the platforms to register and regulate them,” the SEC chief revealed.

SEC Chairman Gary Gensler’s video on regulating crypto exchanges

US Securities and Exchange Commission (SEC) Chairman Gary Gensler released a video on Thursday explaining how the securities watchdog plans to regulate cryptocurrency exchanges and ensure investor protection.

In the video, Gensler explained the similarities and differences between cryptocurrency trading platforms and traditional exchanges like the New York Stock Exchange (NYSE). “When you trade on the stock market, you have certain protections,” he began, adding that investors are “protected against fraud, manipulation, running and the like.”

Noting that crypto platforms serve “millions, sometimes tens of millions” of retail users who directly buy and sell crypto assets without the intermediary of a broker, the SEC chairman elaborated: “With so many retail customers trading on crypto platforms, we should be sure that those platforms offer similar protections” to traditional security platforms. He added:

So I asked our staff to work directly with the platforms to register and regulate them to ensure that those crypto tokens also come and register where appropriate as securities.

“Imagine if you gave all your stocks to the New York Stock Exchange, it would never fly,” he noted, adding: “That’s why I asked the staff how to work with the platforms to best protect your assets.”

Gensler then cited another risk factor inherent in crypto exchanges. “Unlike traditional stock exchanges, crypto trading platforms can also act as market makers,” he described. “When you sell your tokens, maybe one of the platforms is actually buying on the other side,” the SEC chairman emphasized, elaborating:

Exchanges don’t do that, they don’t serve as their own market makers because that creates inherent conflicts of interest.

“I have again asked staff to consider whether it would be appropriate to separate the market-making functions of these crypto platforms,” ​​he said.

In conclusion, the SEC chairman emphasized: “There is no reason to treat the crypto market differently just because it uses a different technology. That would be like saying electric car drivers don’t need seat belts because they don’t use gas.”

He also tweeted on Thursday: “We have rules in place in our capital markets to protect market integrity and protect against fraud and manipulation. If a company builds a crypto market that protects investors and meets the standards of our market regulations, people are more likely to have more confidence in that market.”

Gensler’s video received some criticism on Twitter. Some people accuse Gensler of spending time and resources promoting himself instead of doing his job regulating the crypto sector. Others criticized the SEC for using an enforcement-oriented approach to regulating crypto assets.

Congressman Bill Huizenga (R-MI) tweeted to Gensler, “The SEC should stop using regulation enforcement to provide ‘clarity’ to the market,” elaborating:

No exchange wants to ‘go in and register’ without knowing what those market regulations are.

Last week, the regulator charged former Coinbase employee in an insider trading case, naming nine crypto tokens as securities in the suit.

What do you think of SEC Chairman Gary Gensler’s video on regulating crypto exchanges? Let us know in the comments section below.

SEC Chairman Releases Video Plan to Regulate Crypto Trading Platforms – Bitcoin News Regulation

Kevin Helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects, and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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