Garry Genslerpresident of the Securities and Exchange Commission (Securities Commission, SEC), revealed they want the agency to cover many entities in the crypto industry with regulations applying to securities – which could encourage crypto adoption at the institutional level.
Gensler has established himself as a vocal critic of many segments of the crypto industry, and a speech recent report indicates its intention to strengthen regulations and support enforcement efforts.
According to his previous statements, he believes that the vast majority of digital assets fall under the regulatory jurisdiction of the SEC, and that crypto trading platforms should register with the agency.
Investors deserve to be protected
In his speech, Gensler said, “Investors deserve education to help them sort out which investments they think might flourish and which they think might disappoint. to be protected against fraud and manipulation.
“Our fundamental goal is to provide investors with the protections and information they deserve – and which are required by law,” adding that, for this reason, he has “directed SEC staff to work directly with entrepreneurs to have their tokens registered and regulated, where applicable, as securities.”
Revealing the regulator’s interest in crypto exchanges, Gensler said that because many crypto tokens can be viewed as securities, it means that many “crypto intermediaries” transact in securities and therefore must s register with the SEC.
He added: “Crypto intermediaries also engage in the business of transacting investment tokens on behalf of others, which makes them brokers, or engage in the business of to buy and sell these type of tokens for their own account, which makes them traders.”
Crypto entities that perform loan-for-yield functions fall under the jurisdiction of the SEC if they offer and sell securities, he said, noting that many decentralized finance protocol (DeFI) and decentralized autonomous organizations (DAO) could also end up under the microscope of the SEC.
“The amalgamation of different functions within crypto intermediaries creates inherent conflicts of interest and risks for investors. As such, I have instructed staff to work with intermediaries to ensure they record each of their functions – exchange, broker-dealer, custodial functions and others – which could result in the disaggregation of their functions into separate legal entities to mitigate conflicts of interest and enhance investor protection,” the official explained.
In his speech, Gensler also claimed that the Commodity Futures Trading Commission (CFTC) needs more powers with which to oversee and regulate other types of crypto tokens and related intermediaries.
“I look forward to working with Congress to achieve this goal consistent with regulation of investment tokens and related intermediaries at the SEC,” he said.
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Why Gary Gensler’s (SEC) Latest Speech Could Be Positive for Institutional Adoption
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