SEC Chair Gensler Says Cryptocurrency Exchanges Need More Regulation, Asks Congress to Weigh in
As if cryptocurrencies didn’t have enough problems, the U.S. government is weighing in. At a Senate hearing yesterday, SEC Chairperson Maryann Gensler testified that cryptocurrency exchanges need more regulation. She noted that the currency is “a highly speculative asset” and that there is “poor investor protection” in the cryptocurrency world. Gensler called on Congress to help determine what the appropriate regulatory environment for cryptocurrencies should be. She also asked Congress to consider how regulation might affect the development of the currency.
Cryptocurrency and virtual currency exchanges need more regulation, according to Securities and Exchange Commission (SEC) Chairperson Mary Jo White. Gensler’s remarks, made in Senate testimony yesterday, came amid growing concerns that the Mt Gox debacle and other run-ins with the law will scare off potential investors. The only thing left to do is wait for Congress to weigh in on how to regulate digital currency. (The SEC is not the only governmental law enforcement agency that is looking into bitcoin exchanges, either; the Department of Homeland Security is considering the creation of a task force to investigate virtual currency.) Negative
Today in a speech at the Brookings Institution, Jay Clayton, Chairman of the Securities and Exchange Commission, said that cryptocurrencies should be regulated more like traditional financial institutions. “I believe that initial coin offerings—whether they represent offerings of securities or not—can be effective ways for entrepreneurs and others to raise funding, including for innovative projects,” Clayton said. “However, any such activity that involves an offering of securities must be accompanied by the important disclosures, processes and other investor protections that our securities laws require.” Clayton also called for the Congress to consider creating a new category of cryptocurrency-related companies. “I believe that we should have clear rules of the road for this innovative technology,” Clayton said. “I
Gary Gensler, the new chairman of the US Securities and Exchange Commission (SEC), is pushing for more regulation of cryptocurrency exchanges, citing the need to protect investors in the space. He asked Congress for its opinion.
SEC chairman calls for tighter regulation of cryptocurrencies
SEC Chairman Gary Gensler spoke Thursday at the Financial Industry Regulatory Authority’s (FINRA) conference on the regulation of cryptocurrencies. FINRA is a government-recognized nonprofit organization that oversees broker-dealers in the US. At the SEC, we focus on prosecuting misconduct wherever we find it in the financial system, Gensler began. This means that individuals and companies must be accountable without fear or reservation to the nearly $100 trillion capital markets that we control. When discussing the regulation of cryptocurrencies, the new SEC chair emphasized the need for better investor protection. He noted that he would like to see more regulation around cryptocurrency exchanges, including those that trade exclusively in bitcoin and do not currently have to register with the SEC, he said: It is a fairly volatile asset class, one might even say highly volatile, and the investing public would only benefit from more investor protection on cryptocurrency exchanges. Gensler said that there is no authority to incorporate and write rules to protect the investing public when it comes to crypto exchanges, and reiterated that the investing public could only benefit from more regulation in this area. The SEC chairman also said he has asked Congress to investigate the matter. He also explained that cryptocurrency tokens, which are issued just like traditional investment tokens, fall under the jurisdiction of the SEC, noting that the agency has taken about six dozen enforcement actions against those offering unregistered securities. And there are hundreds of tokens, so we will continue to test and apply, do what we can in this space, he says. According to an independent study, the SEC has brought about 75 enforcement actions against the crypto industry to date. In addition, Gensler stressed the need for the SEC to update its rules regarding the marketing of cryptocurrencies and their use, including through gaming features in mobile apps offered by retail brokerage firms, robo-advisors and wealth management firms. We must do everything in our power to ensure that bad actors do not gamble with the savings of working families and that the rules are aggressively and consistently enforced, Gensler said. Individual responsibility is an important part of any enforcement program. I think we should continue to use bars and similar protections where appropriate to protect the public. The SEC Chairman advised: Technology is constantly evolving, as are our markets. By keeping abreast of these developments, the SEC and FINRA should be prepared to act on issues such as cryptocurrencies, cyber and fintech. Do you think cryptocurrency exchanges should be more regulated? Let us know your comments in the section below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The US Securities Exchange Commission (SEC) has been cracking down on the cryptocurrency world this year, with Chairperson Elad Roisman saying that the SEC can enforce federal securities laws against Bitcoin and Ethereum. The SEC has increasing evidence that a number of online trading platforms for digital assets operating in the United States are breaking the law. Simply put, the SEC has determined that these platforms are not registered with the SEC or exempt from registration.. Read more about bitcoin news today and let us know what you think.
Frequently Asked Questions
Does the SEC regulate Cryptocurrency?
This text is sensitive. Click edit and regenerate for new copy. Cryptocurrency has been a hot topic for quite some time now, but so far it has remained unregulated. That could all change in the near future, however, as the Securities and Exchange Commission (SEC) recently proposed that all crypto-exchanges be registered with the government. This would mean that the SEC would have a say in how crypto-exchange companies operate, including how they manage customer funds and how their databases are protected.
Are Cryptocurrency exchanges regulated?
Cryptocurrency exchanges are not regulated at present. Jan. 31, 2014, the U.S. Securities and Exchange Commission (SEC) said that they were examining the coins to see if they were securities. If they were securities, then they would have to register with the SEC or face legal repercussions. The SEC is also exploring the possibility of regulating the exchanges. As the popularity of Bitcoin and other cryptocurrencies grow, concerns are being voiced over the risk associated with the unregulated cryptocurrency exchanges that allow customers to buy and sell digital currency.
What happens if Cryptocurrency is regulated?
On September 19th, Bethany McLean wrote an article titled “What happens if Cryptocurrency is regulated?” for the (Cryptocurrency) blog called (darknotetalk), that is described as “We talk about the future of cryptocurrency, bitcoin, and blockchain technology. Our community is strong supporters of cryptocurrency, and we are always willing to answer questions.”. McLean’s article describes the potential future of cryptocurrency, bitcoin, and blockchain technology if they were to be regulated by the SEC. The cryptocurrency community is constantly changing. It’s unique culture of decentralized, anonymous transactions and lack of a central monetary institution has made it an attractive option for those looking to avoid the oversight of a bank. However, increased visibility in the past year has also made it a target for regulation, and many fear that regulation risks changing the cryptocurrency culture that has made it so popular in the first place.
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