U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has warned that anyone wanting to be in crypto must “do it within the law.” He advised crypto trading platforms to “Build the trust of investors” in what they are doing, cautioning that they must ensure they are not commingling functions, trading against their customers, or using users’ crypto assets for their own purposes.
Gensler’s Warning to Crypto Industry
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, discussed crypto regulations in an interview with CNBC on the sidelines of DC Fintech Week Wednesday.
Regarding FTX, he said the collapsed crypto exchange could be revived under new leadership provided they fully comply with the laws. Gensler stressed: “We would never let the New York Stock Exchange also operate a hedge fund and trade against their members or trade against customers in the market.”
Referencing Tom Farly, a former president of the New York Stock Exchange who recently launched his own digital asset exchange, Gensler said: “If Tom or anybody else wanted to be in this field, I would say, ‘Do it within the law.’” The SEC chairman advised:
Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures — and also that you’re not commingling all these functions, trading against your customers. Or using their crypto assets for your own purposes.
Gensler emphasized that existing securities laws are “very robust and strong,” sufficient to regulate the crypto industry, noting that the SEC simply needs to enforce them. He stressed: “There’s nothing about crypto that’s incompatible with securities laws … You’ve got just a lot of worldwide actors that are currently not complying with these time-tested laws.”
The SEC chair further stated: “Think about how many actors in this space are not complying right now with international sanctions and money laundering laws and are using crypto for nefarious or bad actions.” He added:
If it’s a non-compliant fraudster, why would we want them in our markets?
Last month, Gensler warned that any crypto companies tricking investors should start treating them to compliance with the securities laws. He recently explained that the SEC has been taking a litigation-heavy approach to regulating the crypto industry because it is rife with fraud, abuse, and misconduct.
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