Gary Gensler wants more crypto regulation frameworks to be setup, and asks congress to give the SEC the authority to monitor exchanges.
In a recent Bloomberg interview, Gensler, who has a deep and thorough knowledge of digital assets said that his understanding would not stop him from regulating them thoroughly. Whilst claiming neutrality on crypto, he said he is ‘intrigued’ by them, but he’s ‘not neutral about investor protection’. Obviously, as you would expect from a regulator, he is always going to stick to the line that the SEC had a responsibility to protect particularly retail investors from fraud.
According to the Bloomberg article, Gensler is contemplating a “robust oversight regime, centered on establishing safeguards for the millions of investors who’ve been stocking their portfolios with tokens”.
“If somebody wants to speculate, that’s their choice, but we have a role as a nation to protect those investors against fraud.”
Gary Gensler
Of course Gensler wants more crypto regulation, this is what G-Men do, and many crypto enthusiasts may have some concern (remember that old saying… that the most terrifying thing is the Government knocking on your door and saying they are here to help!) he may indeed have a fair point.
Analogously citing the technological advance of automobiles in the 20th century, Gensler said that the industry did not take off wholesale until there was some regulation, around driving rules, speed limits and even traffic lights and signage… all things which are part of public safety policy. Of course, the obvious argument is that nobody ever got killed by a drunk-driven Bitcoin (with the exception of the poor chap who seemingly managed to electrocute himself trying to fix his mining rig).
“It’s only with bringing things inside—and sort of clearly within our public policy goals—that a technology has a chance of broader adoption,”
Gary Gensler
No timeline on crypto regulation
Although it’s clear that Gensler wants more crypto regulation, he didn’t provide a specific timeline on any SEC action, and says he currently has a list of almost 50 non-crypto policy reviews which could impede any digital asset regulation.
For example, the current memestock revolt which is still playing out with the likes of GameStop and AMC Entertainment, in which retail investors are pitted against Wall Street and Hedge Fund Short sellers in a battle of wills which have seen immense multi-billion losses (and of course some of the paper-handed retail investors who panicked and sold at a loss) as the stocks ripped throughout various points during the year.
Furthermore, Gensler wouldn’t be drawn on whether or not a Bitcoin ETF would be approved any time soon, which would allow a company to invest in Bitcoin and then trade its shares on the market, which is a decision that many investors believe would send Bitcoin’s price to new heights.
Although the SEC has previously been unwilling to permit an EFT of this kind, Gensler has previously spoken about his support for such an ETF during his MIT tenure, which does seem to point to him being somewhat positive overall on cryptocurrency. In fact, some of his academic peers seem to believe that his understanding of digital assets means he will give the overall industry a fair hearing, but others say that despite this, Gensler is likely to disappoint many in the crypto-space.
Similarly, there are other crypto-related issues which he has said he would like to look at first, including Initial Offerings, trading and lending platforms, custody, stablecoin liquidity and DeFi projects, especially where interest earnings could bring certain platforms under the remit of the SEC.
Gensler is due to speak at the Aspen Security Forum today, and has said he will be focusing at least some of his speech on crypto, and we will of course be following this eagerly.
