Crypto Needs Regulation If It’s Going To Survive, Says SEC Boss
September 04 2021 - 7:00PM
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The Chairman of the Securities and Exchange Commission (SEC) has
called for the crypto space to work with regulators. The Financial
Times reported that Chairman Gary Gensler had asked Congress to
empower his agency so they will be better able to govern the
market. It is still not clear yet which agency has oversight of the
cryptocurrency industry, as regulators mainly classify bitcoin as
more of a commodity than it is a security. Related Reading
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Money Is Nearing Its End It is estimated that less than 10% of the
world currently knows about crypto. But nevertheless, it is still a
large enough number that has prompted regulators to start looking
into ways of properly regulating these digital assets. It is no
longer just retail investors who are trying to make some quick
profit on highly volatile markets. Institutional investors have
also thrown their hat in the ring, like in the case of Michael
Saylor’s MicroStrategy. Finance Is About Trust Gensler believes
that if the market is to grow, then it needs to embrace regulation.
The SEC chairman explained that regulation would provide trust in
the market, which is important if the market does not want to
become irrelevant over time. “Finance is about trust, ultimately,”
Gensler said. Gensler’s focus is mostly on trading platforms, given
that this is where the majority (~95%) of activities in the crypto
market are carried out. Related Reading | Here’s How Much Your
$1,200 Stimulus Check Would Be Worth In Various Cryptocurrencies In
2021 Gensler had earlier suggested that crypto platforms register
with the Securities and Exchange Commission (SEC). This was met
with disdain from investors who do not want governmental control
over cryptocurrencies. But Chairman Gray Gensler has again urged
these platforms to register with regulations. “Talk to us, come
in,” said Gensler. “There are a lot of platforms that are in
operation today that would do better engaging and instead there is
a bit of begging for forgiveness, rather than asking for
permission.” Related Reading | Only In Crypto: A Croissant Breaks
Down How GameStop & NFTs Will Boost Ethereum There have been
crackdowns going on in the crypto space on exchanges. Most
prominent of these have been the crackdowns on Binance by various
countries. BlockFi locked in a regulatory showdown down with three
states, and most recently, Uniswap being investigated by the SEC.
Crypto Market Will Benefit From Regulation Regulation may not be an
easy topic in crypto, but it does not make it any less important.
Exchanges already realize that if they wish to grow in the
long-term, they are going to have to work with regulators. To this
end, Sam Bankman-Fried, CEO and co-founder of FTX exchange, said in
an interview that he was taking regulation “extremely seriously.”
The CEO believes that working with regulators will ensure the
survival of the industry. Adding in that exchanges working with
regulators will ensure that the rules being created do not harm the
market, “killing the use for it in the first place.” Related
Reading | New To Bitcoin? Learn To Trade Crypto With The
NewsBTC Trading Course It is still not clear where most crypto
products fall when it comes to regulatory practices. But Gensler
believes decentralized finance platforms fall under the purview of
the SEC. “It doesn’t matter whether it’s a stock token, a
stable-value token backed by securities, or any other virtual
product that provides synthetic exposure to underlying securities,”
Gensler said to the Aspen Security Forum. “These products are
subject to the securities laws and must work within our securities
regime.” Crypto total market cap finds comfortable position above
$2 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Reuters, chart from TradingView.com
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