US SEC Chairman Gensler Calls on Congress to Help Bring ‘Wild West’ Crypto Under Control

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WASHINGTON (Reuters) – The chairman of the United States Securities and Exchange Commission (SEC) on Tuesday called on Congress to give the agency more authority to better monitor cryptocurrency trading, lending and platforms , a “Wild West,” he declared, riddled with fraud and investor risk.

People leave the headquarters of the United States Securities and Exchange Commission (SEC) in Washington, DC, United States on May 12, 2021. Photo taken on May 12, 2021. REUTERS / Andrew Kelly

Gary Gensler said the crypto market involves many tokens that can be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risk.

“This asset class is rife with frauds, scams and abuse in certain applications,” Gensler told a global conference. “We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory loopholes.”

Cryptocurrencies hit a record capitalization of $ 2,000 billion in April, as more investors filled their wallets with digital tokens, but market surveillance remains patchy.

The industry has been eagerly awaiting how Gensler, an appointed Democrat who took over as head of the SEC in April, will approach market surveillance, which he says should be incorporated into mainstream financial regulation.

Gensler gave more information on his thinking on Tuesday, saying he would like Congress to give the SEC the power to oversee cryptocurrency exchanges, which currently fall outside the SEC’s jurisdiction.

He also called on lawmakers to give the SEC more power to oversee crypto lending and platforms such as decentralized peer-to-peer (DeFi) funding sites that allow lenders and borrowers to make transactions. cryptocurrency transactions without traditional banks.

“If we don’t fix these issues, I’m afraid a lot of people will be hurt. “

Democratic Senator Elizabeth Warren lobbied regulators to control the market, which she described in a July letter to Gensler as “very opaque and volatile.”

Gensler responded by asking Congress to consider giving it more autonomy to regulate the sector.

On Tuesday, he also pointed out that “stock tokens, a stable value token backed by securities or any other virtual product offering synthetic exposure to the underlying securities … are subject to securities laws.”

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