SEC Chairman Calls for Tough Crypto Regulations, Suggests Path for Bitcoin ETF
On Tuesday, August 3, the newly appointed SEC chairman Gary Gensler spoke in detail about the regulatory measures required to handle the booming crypto space. Speaking before the Aspen Security Forum, the SEC chairman called for introducing more transparency and investor protection in the crypto space.
Speaking at the forum, Gensler said: “Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West. This asset class is rife with fraud, scams, and abuse in certain applications. If we don’t address these issues, I worry a lot of people will be hurt”.
The statements from the SEC Chairman comes just at a time when the U.S. lawmakers have been stressing on the need to regulate the crypto market. However, Gensler added that he would need the Congress to grant them additional power “to prevent transactions, products and platforms from falling between regulatory cracks."
Besides, Gensler taught additional powers to maintain a regulatory oversight on decentralised finance (DeFi) and other crypto lending platforms that allow lenders and borrowers to transact in digital assets without any sort of intervention by traditional banks.
Besides, Gensler noted that many digital currencies today are operating as unregistered securities. He further noted that digital assets issued through ICOs should be certainly treated as securities. Genselr said that agrees with former SEC chairman Jay Clayton on this matter.
He further noted: “It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These products are subject to the securities laws and must work within our securities regime”.
Interestingly, the SEC Chairman has signaled a pathway for getting the much-awaited Bitcoin ETF in the market. This is a massive development since the SEC has been blocking all applications for getting a Bitcoin ETF in the U.S. market.
The SEC has denied all previous application on the argument that these derivative assets don’t offer enough investor protection. But Gensler noted that if an ETF complies with SEC’s strict rules for mutual funds, it may find its way into the market.
The SEC chairman said that he’s open to having Bitcoin ETF focused exclusively on bitcoin futures offered by the CME Group. This will require investors to put down substantial margin to trade. “Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures,” he said.