Gary Gensler, chairman of the United States Securities and Exchange Commission, or SEC, reiterated his call for the protection of investors in the securities offered by crypto companies.
In his virtual address at the Robert F. Kennedy Human Rights Compass Investor Conference on Tuesday, Gensler said the SEC would use its existing authority to focus on crypto projects and exchanges, warning people of potentially “too good to be true” investment returns. According to Gensler, most tokens currently on the cryptocurrency market fall under the purview of SEC regulation, subject to the same disclosure requirements as securities.
“We’ve seen again that lending platforms are operating a bit like banks,” Gensler said. “They’re saying: “Give us your cryptocurrencies. We will give you a great return” [….] How can someone offer 4.75% in today’s market and not give much information?”
The SEC chairman added:
“If it seems too good to be true, it may be too good to be true.”
In response to the question regarding the recent volatility of the cryptocurrency market, Gensler said he remained “intrigued by the technology,” but did not directly address whether the SEC would approve a Bitcoin (BTC) exchange-traded fund in the near future. He added that most projects in the cryptocurrency space will “probably crash”, reiterating his warning about high returns without offering much information to the public.
The SEC chairman’s remarks came after Senators Cynthia Lummis and Kirsten Gillibrand proposed a bill that, if passed, would give the Commodity Futures Trading Commission “clear authority over applicable digital assets” as opposed to the SEC. Both US lawmakers met with Gensler in June to discuss finding the best balance of regulatory authority over cryptocurrencies between the CFTC and the SEC.
Many in the cryptocurrency space have criticized the lack of regulatory clarity in the United States, which can be subject to interpretation by multiple government agencies. Gensler has repeatedly called for cryptocurrency projects to register with the SEC in an effort to provide investor protection.
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