SEC Chairman Says Crypto Markets Need Regulations to Prevent Fraud
SEC chairman Gary Gensler said on Friday that greater protection for investors is required in cryptocurrency markets.
Gensler is no stranger to the cryptocurrency world. The former Goldman Sachs investment banker has long been viewed as a strong candidate to take the SEC chairman role.
Gensler was sworn in a few weeks ago as Joe Biden’s choice for the next head of the SEC. During Obama’s presidency, Gensler was in charge of the Commodity Futures Trading Commission (CFTC) and was in charge of regulating derivatives.
What makes this particularly interesting is that he will become the first crypto and blockchain expert to hold the highly regarded position. A former MIT professor, he taught a course entitled “Blockchain and Money” and believes the two are a “catalyst for change.” Gensler stated at his SEC nomination hearing:
“Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion. But they’ve also raised new issues of investor protection that we still need to attend to.”
Despite his support and optimism, the new SEC chairman also expressed concern about the protections investors are not getting in the crypto asset market. Gensler understands the attraction of bitcoin and other coins, but worries investors are taking on more risk than necessary.
“It’s a digital, scarce store of value, but highly volatile,” Gensler says. “And there’s investors that want to trade that, and trade that for its volatility, in some cases just because it is lower correlation with other markets. I think that we need greater investor protection there.”
He believes that as long as technology continues to change the way consumers interact with markets, regulations to protect said consumers have to keep pace.
He went on to say that he believes BTC is a “speculative” store of value and that the Securities and Exchange Commission should remain “tech neutral” when looking at innovations in markets.
The new chairman believes there needs to be an official authority for a regulator to oversee digital currency exchanges.
