U.S. SEC chair says more investor protection needed on crypto exchanges

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U.S. Securities and Exchange Commission chairman Gary Gensler said Thursday he would like to see tighter regulation of cryptocurrency exchanges, including those that only trade bitcoin and currently do not have to register with his agency.

“This is a fairly volatile, one could say very volatile, asset class, and the investing public would benefit from better investor protection on the crypto exchanges,” he said at the financial industry regulator’s annual conference.

His comments came a day after a brutal Bitcoin sell-off over concerns about tighter regulation in China and unease about the extent of leverage among investors. Continue reading

Gensler said he asked Congress to look into the matter.

Crypto tokens issued in the same way as classic investment tokens fall under the jurisdiction of the SEC, and the regulator has taken around six dozen enforcement actions against those who are not registered with the agency, Gensler added.

“And there are hundreds of tokens out there, so we’ll keep testing and enforcement and doing what we can in that area,” he said.

The SEC also needs to update its rules for marketing and using cryptocurrencies in the 2020s, including through playful mobile application features offered by retail brokers, robo-advisors and wealth management companies, Gensler said.

“We all know these mobile applications can provide better access and real improvement, but at the same time we need to brush up and make sure our rule sets address this properly when communicating with the public,” he said.

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