The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, in a Wednesday hearing said that it had become expedient for the agency to work on improving investor protection by regulating crypto exchanges.
During the hearing before the Financial Services and General Government subcommittee of the House of Representatives, Gensler was questioned about the likelihood of a new regulatory category for digital assets. In his response, he asserted that the size of the industry makes it challenging to create sufficient consumer protections. According to him, despite the thousands of cryptocurrencies, his agency has only brought 75 actions.
He goes further to opine that the best place to implement consumer protections is at crypto exchanges.
I would think if we could work with Congress to try to bring investor protection where these — sometimes commodities, sometimes securities — are trading on the platforms.
Gensler also noted that without “rules of the road,” market participants will front-run traders’ orders. He hopes to bring the same level of protection on venues like Nasdaq and the New York Stock Exchange (NYSE) to the crypto exchanges.
However, to make this work, Gensler believes that the agency will need more funding. Recall, that the Internal Revenue Service (IRS) recently received $80 billion to expand its resources and manpower. Gensler may just get the funding he seeks from Biden.