Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said he thinks the cryptocurrency market, now valued at $ 2 trillion, needs more regulation, CoinDesk reported.
Gensler held his first public hearing since becoming head of the U.S. regulator, saying the SEC’s authority is limited to securities and products or asset managers that may invest in crypto, according to CoinDesk.
However, he said Congress should consider playing a bigger role in clarifying the rules for the process, although it didn’t make it clear what that might look like, CoinDesk reported.
“Currently these exchanges have no regulatory framework with the SEC or with our sister agency, the Commodity Futures Trading Commission [(CTFC)]”He said on CoinDesk.” Right now there is no market regulator for these crypto exchanges, so there really is no protection against fraud or manipulation. “
These comments came in response to a question about digital assets by Rep. Patrick McHenry of North Carolina. Gensler’s response also touched on the proposed custody arrangement, which he hopes will move forward, according to CoinDesk.
McHenry sponsored a bill setting out how the SEC and CFTC would share control of crypto. He asked Gensler how he would improve the clarity of the regulations, CoinDesk reported.
The hearing in question was held by the House Financial Services Committee in response to the hectic stock trading environment from early 2021, when meme stocks like GameStop and AMC were unexpectedly raised about the bets placed on them by hedge funds, according to CoinDesk.
At the hearing, Gensler said technology could “provide better access to our capital markets,” referring to sites like Reddit and the ways in which they can affect markets, CoinDesk reported. But he said he didn’t want to restrict freedom of speech. He said he just wanted to make sure malicious actors didn’t participate in this year’s stock market chaos.
In response to a lot of money laundering related to cryptocurrency, PYMNTS found that 56 percent of exchanges were not fully aware of their customer processes (KYC), which has also recently become a focus of regulators as the role of crypto in the world is assessed .
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