On Thursday, SEC Chairman Gary Gensler was asked in an interview if the SEC can be expected on a “crypto regulatory front” in the coming months. It has been months since the SEC said it would come up with a nationwide policy to regulate crypto. President Joe Biden also signed an executive order in May for all of the government to work on a crypto policy led by the Commodities and Futures Trading Commission (CFTC).
Coming back to the question asked to the SEC chair, Gensler replied: “More broadly, the public right now would benefit from investor protection around these various service providers … the exchanges, the lending platforms, and the broker-dealers.”
Gensler said that he has time and again appealed to crypto exchanges, trading platforms, and lending platforms to come and talk to them. He further said that the SEC has power instilled in it by the constitution and Congress to alter some laws under special circumstances for better investor protection.
“We do have robust authorities from Congress also to use our exemptive authorities that we can tailor investor protection.”
He added that the securities regulator can even tailor the disclosures for tokens themselves and that not all disclosures for someone issuing equities may apply to crypto issuers.
“We are also looking at the tokens, the stablecoins, and the non-stablecoins. Separately, we do have discussions with the bank regulators and with our friends and colleagues at the CFTC.”
He restated that “Bitcoin is a non-security token,” and that the SEC will send information to the CFTC and “collaborate as best we can” with non-security tokens. In June, Gensler stated that bitcoin is a commodity but declined to comment on other crypto tokens such as ether (ETH).
In May, the concept of “one rule book” was introduced by the SEC chair for the regulation of crypto tokens. At the time, he said he was collaborating with his CFTC counterparts on a memorandum of understanding, emphasising that it would be a formal agreement to guarantee that trading in digital assets has sufficient safety and transparency.
Gensler issued a warning that many cryptocurrency tokens will fail in the wake of the failure of the cryptocurrencies Terra (LUNA) and Terrausd (UST). After cryptocurrency lender Celsius Network halted withdrawals, he also warned investors about “too good to be true” crypto items.
Currently, Celsius is being investigated by the SEC for its action to freeze accounts. Last week, the cryptocurrency company requested bankruptcy protection. The securities regulator is also looking into UST and Terraform Labs, both owned by Do Kwon.
Image Credits: Evelyn Hockstein | Pool | Reuters