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The Chairman of the US Securities and Exchange Commission Gary Gensler called on Congress to give financial regulators more powers to protect investors in the “Wild West” cryptocurrency markets, which are “full of fraud, scams and abuse.”
Gensler plans to speak before the Aspen Security Forum on Tuesday as the U.S. authorities are scrambling to deal with the explosive growth of the crypto market. He said that the crypto market is worth about $1.6 trillion, of which 77 tokens are worth at least 1 billion U.S. dollars.
In his prepared speech, Gensler stated that, except for ransomware attacks or “circumvention of our anti-money laundering, sanctions, and tax laws,” he has seen little sign of the popularity of encrypted assets as a medium of exchange.
He suggested treating them as “Highly speculative “Store of value” gives regulators the responsibility to protect investors in asset classes.
“Currently, we don’t have enough investor protection in cryptocurrency,” he said. “Frankly, at this time, it’s more like the Wild West. This asset class is rife with fraud, scams and abuse in some applications.”
Gensler added: “There is a lot of hype and rotation about how crypto assets operate. In many cases, investors cannot get strict, balanced, and complete information. If we don’t solve these problems, I am worried that many people will be harmed.”
Gensler vowed that the U.S. Securities and Exchange Commission will act in accordance with its existing powers to supervise crypto assets that can be defined as securities under U.S. law. He added that platforms that trade such securities “must be registered with the commission.”
“Whether it is a stock token, a stable value token backed by securities, or any other virtual product that provides comprehensive exposure to the underlying securities,” he said. “These products are subject to securities laws and must operate within our securities system.”
However, Gensler stated that Congress still needs to take action to give US regulators additional powers to protect investors in the absence of clear rules regarding crypto assets.
“There are some gaps in this field,” he said. “We need more congressional authorization to prevent transactions, products and platforms from falling into regulatory loopholes. We also need more resources to protect investors in this growing and turbulent industry.”
Gensler stated, “Legislative priorities should be focused on crypto trading, lending and DeFi (decentralized finance) platforms. Regulator Will benefit from the additional power of the whole to set rules and attach guardrails to cryptocurrency transactions and lending. “
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