SEC chairman Gary Gensler wants to clean up the crypto space

Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said in an interview on Tuesday that he wanted to bring cryptocurrencies “within the framework of public policy”.

During one Live interviews with the Washington Post, Gensler indicated that he wanted to ensure that cryptocurrencies fall within the scope of regulation. If you interpret this statement in the previous context of his actions, the SEC chairman wants to subject crypto currencies to (political) goals. Gensler underpins this by saying in the interview that regulation is necessary so that the rapidly growing sector does not “undermine the stability of the system.”

First of all, it should be noted that Gary Gensler clearly has expertise and knowledge in the field of blockchain technology and cryptocurrencies with his studies at MIT.

“I taught and studied the subject at MIT for several years and I wouldn’t have looked at it if I didn’t think it was interesting and innovative. But at the same time, I don’t think the technology will last without a social and political framework. “

For Gensler is currently – at this stage of the industry – the protection of consumers and investors of the greatest importance.

This, in turn, is not just Gensler’s personal opinion, but rather a basic task of the supervisory authority. Finally, the SEC’s remit includes investor protection in the securities markets. However, Gensler is of the opinion that the authority must cover a broader field in order to be able to do justice to the growing crypto space.

The SEC chairman plans to take a close look at crypto platforms in the future, as many of the cryptocurrencies could have properties of investment contracts or securities. In this context, the intended English word comes up again and again security.

Should a crypto currency be classified as security, the corresponding securities laws apply and Gensler’s authority enters the floor.

“It is very likely that they will offer securities investment contracts or promissory notes or others that meet the definition of securities on these platforms. These platforms should get in touch. You should find out how to register, be it for the sake of investor protection. But many did not do that. “

Gensler also pointed out that in the area of ​​stablecoins, the authorities may need to continue working with banking regulators, since “stablecoins can have properties of investment contracts and some properties of banking products.” The SEC chairman is primarily targeting the DeFi sector and the services offered there, such as lending or staking, which can be used to generate interest.

For Gensler, however, stablecoins are not a safe asset – no matter what properties they might have.

“At the moment, stablecoins act almost like poker chips in a casino […] – We have a lot of casinos here in the Wild West and the poker chips, these stablecoins, on the gaming tables of the casinos. So I think there are a lot of warning signs and flashing lights that indicate that overheating is possible and I would rather get there. “

All in all, it can be said that the SEC chairman’s interview underpins his opinion that there should be more regulation. Gensler considers further control of cryptocurrencies by the SEC and other supervisory authorities to be useful. In order to be able to implement this more efficiently and on the basis of legal principles, the involvement of the US Congress is not unlikely. The fact is that regulation ensures legal certainty. This aspect can be interpreted as positive, since legal certainty is especially the basis for medium to long-term investments. On the other hand, excessive regulation can lead to a slowdown in innovation, as young startups face high hurdles.