US SEC Opens the Doors to Work with the Congress for a Crypto Regulation

The US Securities and Exchange Commission (SEC) is looking forward to establishing a cooperation with the lawmakers from Congress and other regulatory bodies to work on ways to protect crypto investors. Gary Gensler, the US top financial regulator chairman, said his office wants to provide people similar protections when dealing with the New York Stock Exchange.

During a hearing before the Financial Services and General Government subcommittee of the House of Representatives, Gensler highlighted recent Bitcoin’s price action and its media attention. However, he recognized there are plenty of cryptos that are on a highly volatile market. “Many of these tokens are investment contracts under the securities law. Over the years, the SEC has brought 75 cases in this area,” he stated.

Looking Forward to Meeting You at iFX EXPO Dubai May 2021 – Making It Happen!

That said, the US SEC chairman believes there are still many gaps to fill in that regulators should provide enough investors’ protection before such an environment.

“There are many challenges and gaps for investor protection in these markets. Tokens currently on the market that are securities may be offered, sold, and traded in non-compliance with the federal securities laws. Furthermore, none of the exchanges trading crypto tokens has registered yet as an exchange with the SEC. Altogether, this has led to substantially less investor protection than in our traditional securities markets and to correspondingly greater opportunities for fraud and manipulation. The Commission has prioritized token-related cases involving fraud or other significant harm to investors,” Gensler said during his opening speech.

DeFi and Crypto Lending Platforms

Furthermore, he pointed out that crypto lending platforms and decentralized finance (DeFI) platforms brought further challenges for investors and stated the SEC is trying to protect them. Gensler added that the regulator aims to gather comments on crypto custody arrangements by broker-dealers.

As Finance Magnates reported in February, Hester Peirce, a Commissioner at the US SEC, called to address the urgent need for clear crypto regulations amid the growing mainstream adoption witnessed over the last few months.