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The US Securities and Alternate Fee is on the lookout for methods to manage cryptocurrency buying and selling platforms that would embody hiving off a few of their operations, says Gary Gensler, chair of the regulator.
In a speech on Monday, Gensler mentioned crypto buying and selling platforms that deal with greater than $100bn in transactions a day differ from conventional exchanges as a result of they do extra issues — akin to taking custody of buyer belongings and buying and selling in listed tokens as “market makers”.
Citing statistics that $14bn in buyer crypto belongings have been stolen final yr, he mentioned he had requested SEC workers to look into whether or not “it might applicable to segregate out custody” capabilities on the platforms.
He mentioned he had requested workers to think about related steps for the market-making actions of crypto exchanges due to points raised after they commerce as “principals towards their prospects on their platforms”.
Directing workers to discover these points could possibly be a primary step by the fee in formally setting a rule.
Gensler reiterated his perception that the majority cryptocurrencies — and the platforms the place they’re traded — needs to be regulated by the SEC as a result of the tokens qualify as securities beneath US legislation.
“As we speak, many entrepreneurs are elevating cash from the general public by promoting crypto tokens, with the expectation that the managers will construct an ecosystem the place the token is beneficial,” Gensler mentioned.
“These aren’t laundromat tokens,” he added. “Someone is constructing an ecosystem to make it helpful, which can draw extra customers to the undertaking. Thus, it’s necessary that we work to get crypto tokens which are securities to be registered with the SEC.”
Constructing on his earlier requires crypto platforms to register with the SEC, Gensler mentioned he had requested workers to work on “getting the platforms themselves registered and controlled very like exchanges”.
He added that as a result of a “few” cryptocurrencies are commodities beneath US legislation — functioning “like digital gold” — the SEC was additionally seeking to work with the Commodity Futures Buying and selling Fee, a derivatives regulator he as soon as headed, on “how we would collectively tackle such platforms”.
“There’s no motive to deal with the crypto market in a different way simply because totally different expertise is used. We needs to be technology-neutral, however not policy-neutral,” he advised a convention on the College of Pennsylvania.
“These crypto platforms play roles much like these of conventional regulated exchanges,” he added. “Buyers needs to be protected in the identical approach. The US has the best capital markets as a result of buyers place confidence in them.”
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