SEC Chairman Gary Gensler talks about crypto regulation as highly important. On Friday, Gensler spoke before the U.S. Treasury Departments Financial Stability Oversight Council. He said, “Nothing about the crypto market is incompatible with the securities laws. Yet risks from this speculative volatile, and what I believe is a largely non-compliant market, put investors at risk.” He detailed, “This is why bringing intermediaries and issuers of crypto securities tokens into compliance is so important.”
The SEC chief emphasized that even though the threats from the cryptocurrency markets have not yet affected the traditional financial sector. We must be ready for it. He said, “While the risks from the crypto markets generally do not appear to date to have spread to the traditional financial sector, we must remain vigilant to guard against that possibility.”
Given that SEC staff members, including the chairman, had many meetings with former FTX CEO Sam Bankman-Fried, Gensler and the SEC have come under criticism. For failing to prevent the collapse of the cryptocurrency exchange FTX (SBF).
Following his arrest in the Bahamas last week, the securities watchdog last week filed a fraud complaint against Bankman-Fried and his exchange. U.S. Congressman Tom Emmer has urged Gensler to speak before Congress concerning the cost of his crypto regulatory failures.
Crypto Regulation Recommendations
Additionally, the 2022 annual report of the Financial Stability Oversight Council was formally passed on Friday. Gensler supported the report that the U.S. Treasury Department announced. In their words, “The Council emphasizes the importance of agencies continuing to enforce existing rules and regulations applicable to the crypto-asset ecosystem.”
The Council has noted deficiencies in the legislation governing crypto-related activity, and to fix these gaps, the Council has suggested. “The enactment of legislation providing for rulemaking authority for federal financial regulators over the spot market for crypto assets that are not securities.” The Treasury further emphasized. “Steps should be taken to address regulatory arbitrage since crypto asset entities offer services similar to traditional financial institutions but do not have a consistent or comprehensive regulatory framework.”
Two U.S. Senators passed a bipartisan bill for the importance of crypto regulation. The bill was titled “Digital Asset Anti–Money Laundering Act.” According to crypto advocates, “the most direct attack on the personal freedom and privacy of cryptocurrency users and developers we’ve yet seen.”