SEC Chief Wants To Treat Crypto Market As Capital Markets

SEC Chief Gary Gensler wants to treat the crypto market no differently than traditional capital markets. He further stated that just because it (the crypto market) uses a different technology, there is no reason to treat it like something special and apparat from capital markets.

What do automobile manufacturers have to do with cryptocurrency loan platforms? Consumers and investors deserve protection, and that applies to both motor cars and investment vehicles, according to Gary Gensler, chairman of the United States Securities and Exchange Commission, in a Wall Street Journal op-ed published Friday night.

President Franklin Roosevelt signed federal securities regulations during the Great Depression of the 1930s with the intention of protecting investors, just as the National Traffic and Motor Vehicle Safety Act signed by President Lyndon Johnson in 1966 protects drivers.

Recent market occurrences, such as certain crypto lending platforms freezing investor accounts or filing for bankruptcy, demonstrate why it is vital that crypto enterprises comply with securities rules, according to Gensler.

SEC Chief Gary Gensler Wants To Treat Crypto Market No Different

It makes no difference what type of asset an investor puts into a crypto program – cash, gold, bitcoin, chinchillas, or anything else — what the crypto platform performs decides what legal protections are granted, he claimed.

Investors benefit from understanding what underpins the crypto firm’s promises that it would generate a certain return. Disclosure assists the investor in understanding what is happening with his or her investments.

The crypto platform, whether it’s termed a loan platform, a crypto exchange, or a decentralized finance platform, can’t evade complying with time-tested investor safeguards by slapping a name on the product or the promised advantages, he said. The Supreme Court has often stated that the economic reality of a product, not its labeling, decides whether it is a security under securities laws.

The Securities and Exchange Commission discovered this in a recent settlement with the crypto-lending site BlockFi.

Noncompliance is neither a natural byproduct of the crypto business model or the underlying crypto technology. Rather, it’s as if these platforms are saying they have a choice — or, worse, “Catch us if you can,” according to Gensler.

Gary Gensler also said on the topic:

‘We can dispense with the idea that crypto lending isn’t subject to regulation. On the contrary, the rules have been around for decades. The platforms aren’t following them.’

Check out today’s news.