SEC Chairman: We Need to Introduce Regulation of Crypto Exchanges

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The new chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has asked Congress to develop a legal framework to regulate the cryptocurrency industry.

On Thursday, a meeting of the House of Representatives Financial Services Committee was held, the topic of which was the volatility in the GameStop market and other popular shares on social networks. One of the questions asked to Gensler related to further cryptocurrency regulation measures.

 

“This near $ 2 trillion market, the crypto asset market, has the potential to be positively impacted by increased investor protection,” Gensler said. – I really believe that together with Congress, I believe that only Congress can actually solve this problem. It is worth considering bringing stronger investor protection to cryptocurrency exchanges. Currently, the exchanges that trade these cryptoassets are not regulated by either the SEC or our sister agency, the Commodity Futures Trading Commission (CFTC). This would increase confidence. Now there is no market regulator that would deal with these exchanges. Accordingly, there is no real protection against fraud or manipulation. ”

 

In general, Gensler’s coming to the post of head of the SEC was associated with positive expectations. He is regarded as someone who understands cryptocurrencies: Gensler taught a course on cryptocurrencies and blockchain at the Massachusetts Institute of Technology, of which he is a professor.

The SEC chairman also noted that the department is dealing with the impact of social networks on financial markets.

 

“This practice, called sentiment analysis, has been gaining traction over the past couple of years and has made its way to online communities. There are risks that attackers might try to send signals to manipulate the market. We continue to deepen our understanding, resources and capabilities in this area, ”he said.

 

Among other things, lawmakers propose to assign to the SEC the role of assessing the “gamification” of investments. In this case, gamification is understood as a form of promoting securities in social networks, which can be included in the category of investment advice.

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