U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has sought formal collaboration between financial agencies to effectively regulate crypto assets.
One set of rules for crypto trading
according to the news report in the Financial Times, Gensler said there should be one set of rules to ensure that attackers don’t exploit regulatory gaps and commit fraud and manipulation. To that end, the SEC chairman said he is working on a Memorandum of Understanding (MoU) between the SEC and the CFTC to address potential regulatory gaps. Gensler was chairman of the CFTC from 2009 to 2013.
He made the remark amid a bipartisan cryptocurrency regulation bill introduced by US Senators Cynthia Lummis and Kirsten Gillibrand on June 7. It aims to define most digital assets as commodities and supports an expanded role for the Commodity Futures Trading Commission (CFTC) in regulating their trading. .
Regulatory eye control SEC
Because the SEC has actively lobbied to bring digital assets into its purview, treating them as securities rather than commodities, the bill to regulate cryptocurrencies in its current form leaves the SEC with no say in regulation.
“I am talking about one set of rules on the exchange that protects all trading regardless of the pair – [be it] security token versus security token, security token versus commodity token, commodity token versus commodity token,” Gensler said, adding that this is necessary to protect investors.
Earlier, speaking on June 15 at the Wall Street Journal CFO network, Gensler argued that cryptocurrencies are securities and the SEC has the right to seek control over their regulation.
“These tokens are being offered to the public and the public is hoping for a better future. These are the characteristics of an investment contract,” he explained.
CFTC Says Crypto Fits Naturally
Speaking at an event earlier this month, Rostin Behnam, who took over as chairman of the CFTC in January 2022, praised the bill as “very good work” that separates digital tokens between securities and commodities. He said that the cryptocurrency markets are ideal for the CFTC.
“Markets are markets, be it derivatives, equities or fixed income… In between. . . derivatives in general and cash markets,” he said, adding that the idea that the CFTC is not the right place for this job is misguided.
Too good to be true
Speaking at an event on June 14, Gary Gensler warned people that crypto lenders offering 4.5% to 7% returns for consumers who deposit their funds are too good to be true.
While his remarks resonate with how Celsius, which offered 17% per annum, was forced to freeze client deposits due to extreme market conditions, the SEC chairman consistently notes the risks and need for regulation in the crypto space.
“How does someone offer (such a large percentage of return) in the market today and not reveal a lot of information?” noted the chairman of the SEC.
Between the provisions of the SEC and the CFTC, the provisions of the former are considered more stringent.
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Credit : cryptopotato.com