The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has asked SEC staff to collaborate with the Commodity Futures Trading Commission (CFTC) to develop a new plan to regulate cryptocurrency trading platforms.
SEC wants to work with CFTC to regulate crypto exchanges
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler spoke about cryptocurrency regulation on Monday at an event hosted by the Carey Law School at the University of Pennsylvania.
“The SEC’s remit is overseeing the capital markets,” the SEC chief began, adding that the agency has a “three-part mission: protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets.”
Noting that the SEC is concerned about the regulation of “crypto platforms, stablecoins, and crypto tokens,” Gensler pointed out:
There’s no reason to treat the crypto market differently just because different technology is used. We should be technology-neutral.
The SEC Chairman said, “I have instructed staff to consider how best to register and regulate venues where trading in securities and non-securities is closely intertwined.” He precised :
In particular, I’ve asked staff to work with the Commodity Futures Trading Commission (CFTC) on how we jointly might address such platforms that might trade both crypto-based security tokens and some commodity tokens, using our respective authorities.
Gensler pointed out that more rules are needed to oversee cryptocurrency exchanges, citing that retail investors are currently vulnerable to scams and market manipulation.
The SEC chairman has said many times that many crypto tokens on platforms that have 50, 100, or even 5,000 coins listed are likely securities. He said:
My predecessor Jay Clayton said it, and I’ll say it again: without prejudging any token, most crypto tokens are investment contracts under the Howey test.
Recently, U.S. Senators Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) unveiled their plan to introduce a broad-based regulatory framework for cryptocurrency. According to the framework, some aspects of the industry will be regulated by the CFTC and some will be overseen by the SEC.
Senator Lummis specifically said that the CFTC will play a bigger role in the new crypto framework. “When you look at bitcoin and ethereum in particular, it’s pretty clear to me that they’re commodities,” she explained.
In August last year, two U.S. lawmakers urged Gensler and the acting chairman of the CFTC to establish a joint working group for the regulation of crypto assets.
