Newly-appointed US Securities and Exchange Commission (SEC) chairman Gary Gensler has advised Congress to regulate cryptocurrency exchanges to protect traders and investors
SEC chairman Gary Gensler had advised the US Congress to regulate the activities of cryptocurrency exchanges in order to protect investors in the market. He said this in his first public hearing since taking the helm at the regulatory agency.
He highlighted that the $2 trillion market needs more investor protection in the United States. Gensler advised Congress to regulate the activities of cryptocurrency exchanges, as they are the first place people go to gain access to cryptocurrencies.
According to Gensler, the SEC won’t be able to regulate crypto exchanges since the agency’s focus is on securities and products or asset managers that might invest in digital currencies. He stated that the biggest focus should be on cryptocurrency trading platforms.
“Right now, these exchanges do not have a regulatory framework at the SEC or at our sister agency, the Commodity Futures Trading Commission. Right now, there’s not a market regulator around these crypto exchanges, and thus there’s really no protection around fraud or manipulation,” he added.
The SEC chair didn’t specify what sort of regulations to put in place. Several countries continue to struggle with the challenges of regulating the cryptocurrency space due to the nature of the market. The crypto space is just over a decade old, and it has undergone numerous changes in the past few years, making it hard for regulatory agencies to roll out appropriate regulations.
However, the massive growth of the market in the past year makes it necessary to regulate the activities of crypto entities, especially exchanges. Crypto traders and investors have lost billions of dollars via exit scams and hacks of cryptocurrency exchanges.