“Risk” About Cryptocurrencies From SEC Chairman Gary Gensler

Some major financial regulators in the USA, cryptocurrency He addressed problems with U.S. firms and called for tighter licensing at today’s meeting of the Financial Stability Oversight Council, a committee of U.S. financial regulators.

“Cryptocurrency Market Puts Investors at Risk”

Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), said in a statement:

“It is crucial to regulate brokers as well as issuers of crypto security tokens. Nothing about crypto markets is compliant with securities laws, but the risk from this speculative, volatile, and largely non-regulatory market, which I believe is not compliant with our current laws, puts investors at risk.”

The SEC, including current Chairman Gensler and former Chairman Jay Clayton, has long argued that most digital assets are securities and fall under the securities laws.

Cryptocurrency exchanges operating in the US currently do this primarily through various state money transmitter licenses.

Rohit Chopra, FSOC member and director of the Consumer Financial Protection Bureau, bitcoin Citing the recent collapse of exchange FTX, he argued that the current status quo is insufficient for crypto and other fintech firms, particularly those holding customer deposits without insurance from the Federal Deposit Insurance Corporation:

“The bankruptcy of such a firm could result in millions of American consumers becoming unsecured creditors of the bankruptcy estate, similar to the experience with FTX. Our state money transfer laws are not designed to ensure the long-term stability of such firms.”

Citing a report by the FSOC in October, Treasury Secretary Janet Yellen stated that “the ties or overall scale of crypto-asset activity to the traditional financial system could pose risks to the US financial system if it grows without proper regulation or backing.”

*Not investment advice.