US Securities and Exchange Commission (SEC) Chairman Gary Gensler has stressed the importance of making “crypto-security intermediaries and issuers” compliant. In addition, the US Treasury Department’s Financial Stability Oversight Council (FSOC) has recommended that regulatory agencies continue to “enforce existing rules and regulations applicable to the crypto-asset ecosystem.”
SEC Chairman Gensler on crypto regulation
SEC Chairman Gary Gensler spoke about crypto regulation on Friday in his remarks to the US Department of Treasury’s Financial Stability Oversight Council (FSOC). Gensler said:
Nothing about crypto markets is inconsistent with securities laws. However, the risks of this speculative, volatile and, in my opinion, largely defaulting market put investors at risk.
“This is why it is so important to make crypto security token issuers and intermediaries compliant,” he stressed.
“While the risks of crypto markets generally do not appear to have spilled over into the traditional financial sector, we must remain vigilant in guarding against that possibility,” the SEC chief concluded.
Gensler and the SEC have been criticized for failing to prevent the collapse of crypto exchange FTX since SEC staff, including the chairman himself, had several meetings with former FTX CEO Sam Bankman-Fried (SBF). The securities watchdog finally loaded Bankman-Fried and its fraudulent crypto exchange last week after it was arrested in the Bahamas US Congressman Tom Emmer has called Gensler to testify before Congress about the cost of its crypto regulatory failures.
Recommendations on crypto regulation of the Financial Stability Oversight Board
The Financial Stability Oversight Board also unanimously approved its 2022 annual report on Friday. In his comments, Gensler said that he supported the FSOC’s report, including his recommendations. According to the US Treasury Department report announcement:
The Council stresses the importance of agencies continuing to enforce existing rules and regulations applicable to the crypto-asset ecosystem.
Noting that the Board has identified gaps in the regulation of crypto activities, Treasury explained that in addressing these gaps, the Board has recommended “the enactment of legislation that gives federal financial regulators regulatory authority over the spot market for crypto assets that they are non-values.” In addition, the Treasury noted: “Steps must be taken to address regulatory arbitrage, as crypto-asset entities offer similar services to traditional financial institutions, but do not have a coherent or comprehensive regulatory framework.”
Last week, two US senators, including Elizabeth Warren (D-MA), inserted a bipartisan bill for the regulation of cryptocurrency. His bill, titled the “Anti-Money Laundering of Digital Assets Act,” is “the most direct attack on the personal freedom and privacy of cryptocurrency users and developers that we have seen so far,” according to advocates of the cryptocurrencies.
What do you think of SEC Chairman Gary Gensler’s comments and the Financial Stability Oversight Board’s recommendations? Let us know in the comments section.
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