US Securities and Exchange Commission (SEC) President, Gary Gensler, cryptocurrency He talked about the regulation of lending platforms.
In a recent article published in the Wall Street Journal, Gensler stated that cryptocurrencies should not be treated differently from other capital markets simply because they use a different technology.
“We need to let go of the idea that crypto loans are unregulated. On the contrary, the rules have been in place for decades, but platforms do not follow them. This environment of mismatch is not the fate of crypto-generated business models or the technology of cryptocurrencies.”
Gensler’s comments come after several high-profile crypto lending firms have collapsed over the past few weeks. In July, embattled crypto broker Voyager Digital filed for bankruptcy after a prominent borrower defaulted on a major loan.
About a week after this incident, crypto lending platform Celsius joined the caravan of bankruptcy by halting all withdrawals from its platform. In a New York-based bankruptcy court, the company filed a $1 billion gap between its assets and liabilities on its balance sheet.
Last month, the SEC chief targeted cryptocurrency exchanges. Gensler explained that crypto exchanges should offer similar consumer protections to other securities services. He also stated that they are not planning any restrictions on the market maker aspect of crypto exchanges.
“Crypto trading platforms can also act as market makers. This means that when you sell your cryptocurrencies, one of the platforms can actually buy from the other side. Stock markets, on the other hand, don’t normally do this. They do not themselves serve as market makers because this creates internal conflicts of interest.
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