Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), said crypto markets should be regulated the same way as traditional securities.
In a new episode of the Office Hours video series, Gensler Explain how the US stock market and crypto exchange platforms look alike, and therefore should offer similar consumer protections.
“These platforms, crypto platforms, like exchanges, connect buyers and sellers. Crypto platforms have millions, sometimes tens of millions, of retail customers who buy and sell directly on the platform without going through a broker.
With so many retail clients trading on crypto platforms, we need to ensure that these platforms offer similar protections. So I asked our staff to work directly with the platforms to get them registered and regulated to ensure that those crypto tokens also arrive and register where appropriate as security.
Gensler goes on to say that the market making aspect of crypto exchanges should be regulated as it creates conflicts of interest.
“Crypto trading platforms can also act as market makers. This means that when you sell your tokens, one of the platforms can actually buy the other side. Scholarships don’t do that. They are not their own market makers, as this creates inherent conflicts of interest.
So, again, I asked the staff if it would be appropriate to separate the market making functions of these crypto platforms.
Gensler then says that there is no reason why crypto assets should be treated any differently than securities when it comes to regulation.
“There is no reason to treat the crypto market differently just because different technology is being used. It would be like telling electric car drivers that they don’t need seat belts because they don’t use gasoline.
We have rules in our capital markets to preserve market integrity and protect against fraud and manipulation. If a company builds a crypto market that protects investors and meets the standards of our market regulations, people are more likely to have greater trust in that market. pic.twitter.com/ZxdBfvmqXP
— Gary Gensler (@GaryGensler) July 28, 2022
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