U.S. SEC Chair Calls For More Crypto Regulation

Gary Gensler asked congress for help with this controversial issue

One of the core tenets of cryptocurrency is decentralization. That means that there isn’t a central authority like a bank or government that issues the money.

But the lack of regulation sometimes means you might get scammed by ICOs or pump-and-dump schemes. The chair of the Security and Exchanges Commission (SEC), Gary Gensler, recently called on Congress to increase regulation in the space:

“This asset class is rife with fraud, scams and abuse in certain applications. We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks.”

Gensler wants the SEC to have more regulatory power to address these scams as well as decentralized finance (DeFi) platforms. Critics of DeFi exchanges don’t think they offer fraud and manipulation protections. Commodity Futures Trading Commission (CFTC) chief Dan Berkovitz said:

“Not only do I think that unlicensed DeFi markets are a bad idea, I also don’t see how they are legal. [U.S. law] requires futures contracts to be traded on a designated contract market licensed and regulated by the CFTC.”

The last year has brought a few different legal cases against cryptocurrency. The SEC sued the cryptocurrency Ripple, claiming that it is unregistered security. The New Jersey Office of the Attorney General is going after BlockFi, a crypto lending platform that allows users to collect yields on cryptocurrency.

The reactions to a lot of these cases in the media are mixed. Some arguments are rife whataboutism criticizing the SEC and other government bodies for not going after fraudsters in traditional finance. I believe that there should be a legitimate place to criticize crypto and improve safety for investors.

But it isn’t really clear to me whether the SEC can take any effective actions at the moment. In the meantime, do your homework before investing in an initial coin offering or using any DeFi platform or exchange.

Source: https://medium.datadriveninvestor.com/u-s-sec-chair-calls-for-more-crypto-regulation-e04c7a4be0e8?source=rss——-8—————–cryptocurrency