When President Biden named Gary Gensler chairman of the US Securities and Exchange Commission, many in the crypto community reacted positively. They thought his MIT background, among other things, could usher in days of lighter regulation. But that was not the case.
As we reported in July, for example, he spoke about stronger regulation of stablecoins and DeFi. And optimism that many had that the SEC would finally approve Bitcoin ETFs under Gensler has faded, with the chairman hinting that approval would be more likely for a futures-based ETF than the cryptocurrency itself.
Most recently, in an interview with the Financial Times on September 1, 2021, he announced the exchange of cryptocurrencies. He reiterated what he has often said about the public imperatives of investor protection, protection from illegal activity, and maintaining financial stability. The article said:
Gensler said he was disappointed with the industry’s reaction to his suggestion that trading platforms register with the SEC because a sufficient number of cryptocurrencies are considered securities. “Talk to us, come in,” he said. “There are a lot of platforms out there today that allow for better interaction, and instead there is a little. . . asking for forgiveness instead of asking permission. “
The chairman also stated that he is focusing on cryptocurrency trading platforms as 95 percent of the activity of what he called a “highly speculative asset” takes place on those platforms, where investor protection he says is “really sparse”.
The second area I’ll highlight is the centrality of stablecoins – crypto tokens tied to the value of fiat currencies – for this market. You’ve heard of Facebook Diem, but we already have a stablecoin market worth $ 116 billion. These tokens are embedded in crypto trading and credit platforms.
In July, almost three-quarters of trading on all crypto trading platforms was between a stablecoin and another token. Hence, using stablecoins on these platforms can make it easier for those looking to circumvent a wide variety of public policy goals related to our traditional banking and financial system: anti-money laundering, sanctions, and more.
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