Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), reiterated the need to tighten regulations on digital currencies at a hearing before the US Senate on the 14th.
The chairman specifically pointed out major crypto exchange Coinbase and said that since many crypto exchanges deal with securities and therefore, should register with the regulatory body.
He also mentioned the problems of several transaction suspensions and connection failure confirmed at major US exchanges such as coin base, Kraken, and Gemini due to last week’s large-scale loss cut and price correction.
The manuscript of Mr. Gensler’s remarks was released in advance before the committee meeting on Tuesday. In the prepared speech, Gensler remarked:
“Right now, large parts of the field of crypto are sitting astride of — not operating within— regulatory frameworks that protect investors and consumers, guard against illicit activity, and ensure for financial stability.
Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending.”
Chairman Gensler has made repeated claims about the regulation of cryptocurrencies. It has long been argued that some cryptocurrencies may fall under the category of securities and should be registered with the SEC as an exchange for securities.
At a hearing on the 14th, Senator Elizabeth Warren, who is skeptical about cryptocurrencies, questioned the exchange’s failure last week. Taking Coinbase as an example, she pointed out that there is a problem if an exchange is down when users are trying to sell their holdings if a market crashes.
In response to the remark, Gensler explained that the SEC does not have the authority to directly oversee cryptocurrency exchanges. In his prepared statement, he said:
“Many platforms have dozens or hundreds of tokens on them. While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that, with 50, 100, or 1,000 tokens, any given platform has zero securities.”
However, the hearing has not yet stated whether cryptocurrency lending and staking platforms will be subject to securities law and will be under the supervision of the SEC.