The Chairman of the United States Securities and Exchange Commission, Gary Gensler has warned cryptocurrency companies to “follow the law” after the agency announced a deal with cryptocurrency exchange Kraken.
Speaking on CNBC’s “Squawk Box” on February 10, gensler said that cryptocurrency exchanges should register with the SEC to comply with US regulations, and claimed that many in the industry were “choosing” not to do so. According to the SEC chairman, the business models of many crypto projects were “riddled with conflicts,” and he claimed they needed to “unravel” bundled products.
“If this field has any chance of survival and success, it is the time-tested rules and laws to protect the investing public,” Gensler said. “Don’t reach into the client’s pocket, using their funds for your own platform.”
“The storefronts and casinos people are investing in need to comply and disentangle bundled products. The business model is rife with conflicts,” says SEC Chair @GaryGensler on #crypto. “If this field has a chance of survival, it needs laws to protect the investing public.” pic.twitter.com/FGRrYE1Aov
— Squawk Box (@SquawkCNBC) February 10, 2023
“The storefronts and casinos that people are investing in need to comply and separate the packaged products. The business model is fraught with conflict,” says SEC Chairman @GaryGensler of the crypto sector. “If this field has any chance of surviving, it needs laws to protect the investing public.”
Gensler’s remarks came after the SEC announced that it had reached an agreement with Kraken whereby the exchange agreed to shut down its betting services and programs for US clients, as well as to pay USD 30 million in restitution, late-payment interest and civil penalties. Kraken said that he would continue to offer staking services for non-US users through a separate affiliate.
Many have criticized the SEC settlement as regulators are taking action against companies that have to navigate a regulatory space without clear guidelines. SEC Commissioner Hester Peirce called the SEC’s actions “lazy and patronizing,” saying the staking program had “served people well.”
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