September 3, 2021
Gary Gensler, the chairman of the Securities and Exchange Commission, implored cryptocurrency trading platforms to work with regulators and cautioned that their failure to do so could end up hurting them.
The SEC chief, who previously taught classes in cryptocurrency finance and blockchain technology at the Massachusetts Institute of Technology, said that regulation insulates investors from threats and maintains financial stability.
“At about $2 trillion of value worldwide, it’s at the level and the nature that if it’s going to have any relevance five and 10 years from now, it’s going to be within a public policy framework,” he told the Financial Times. “History just tells you, it doesn’t last long outside. Finance is about trust, ultimately.”
Gensler told the platforms to come to the table and said they would do better by engaging with the SEC and other federal regulators than by avoiding them. He said that on the part of these cryptocurrency platforms, there has been a bit of “begging for forgiveness rather than asking for permission.”
This isn’t the first time Gensler, who was appointed by Biden, has raised concerns about the regulatory environment surrounding cryptocurrencies and other digital assets. During an August appearance at the Aspen Security Forum, Gensler implored Congress to help rein in the “Wild West” of cryptocurrencies.
Gensler said that while his agency has taken and will continue to take its regulatory authorities over digital assets “as far as they go,” there still remain regulatory gaps.
“We need additional congressional authorities to prevent transactions, products, and platforms from falling between regulatory cracks,” he said.
Cryptocurrencies such as Bitcoin respond poorly to talk of regulation. Bitcoin hit all-time highs earlier this year, but it then took a nosedive after China began cracking down on mining operations and increased cryptocurrency regulations. Since then, the value of cryptocurrency has been steadily increasing, with Bitcoin recently hitting $50,000 for the first time in months.
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