The SEC wants to increase its oversight of the cryptocurrency market following FTX’s collapse.
Gensler wants crypto issuers and exchanges to comply with regulations in the US.
Crypto experts continue to call for promotive regulation of the industry.
The SEC will increase its oversight of the industry
The chairman of the United States Securities and Exchange Commission (SEC) revealed in an interview on Thursday that the agency will increase its oversight of the crypto industry.
According to Gary Gensler, the SEC’s crypto clampdown is just getting started, and the agency wants to ensure that firms comply with existing securities laws.
The SEC chairman believes that the existing crypto rules are adequate, but issuers and exchanges need to ensure compliance. The Chairman of the financial regulator added that those existing rules are adequate for cryptocurrency firms. He said;
“Financial history would tell you that most of these tokens [native tokens of crypto exchanges] will fail. [Insiders] sell the public on an idea while they’re potentially fraudulently pumping up the stock. This leads to distorted incentives and puts the public further at risk of the token not being properly registered and having proper disclosures and complying with the various provisions of the securities law about anti-fraud and anti-manipulation.”
The SEC chair added that the pending charges against FTX set an example for the broader crypto community about the need to have operations compliant with the current securities laws.
He added that FTX’s collapse poses a warning to crypto issuers and exchanges that are not registered with the SEC.
Crypto experts want market regulation
This latest development comes a few days after Gensler told the U.S. Treasury Department’s Financial Stability Oversight Council (FSOC) that it is crucial to regulate crypto companies.
Experts in the industry are already calling for regulations that would protect consumers but don’t eliminate innovation.
Binance CEO CZ said the cryptocurrency industry needs clear and stable regulations. Ron Kruszewski, the CEO of Stifel Financial, also called on the SEC to extend its customer protection to crypto.