SEC Chair Gensler Discusses Crypto Regulation After FTX Collapse – Says This Field Is ‘Significantly Non-Compliant’ – Bitcoin Regulation News

The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has explained the two paths that the agency is taking to regulate the crypto industry. Meanwhile, a US congressman is investigating whether Gensler helped FTX CEO Sam Bankman-Fried and his bankrupt crypto exchange on legal loopholes to obtain a regulatory monopoly.

SEC Chair Gensler on FTX’s Undoing

The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, spoke about crypto regulation and the removal of the FTX cryptocurrency exchange in an interview with CNBC Thursday.

Without confirming whether the SEC is investigate FTX, the chairman explained that when crypto exchanges “mix together a bunch of customer money” without disclosure and “leverage loans against it,” investors get hurt.

He was also asked about the upcoming supervisor Kim Kardashian which, on a relative basis, is something smaller than FTX. Gensler replied:

Look, I think that investors need better protection in this space. But I will say this, this is a field that is significantly non-compliant, but it has regulations and those regulations are often very clear, and we have several lines.

“One line of work with those crypto exchanges, crypto lending platforms, and to register them properly and why it’s important is so that the public is protected,” he explained.

Another path is enforcement, Gensler emphasized. “We’ve taken, between my predecessors and the current team at the SEC, at least 100 actions … and we’ve been very clear on these various enforcement actions.” He also referred to the regulator get the latest against LBRY.

‘Come in, talk to us’

Gensler often said that crypto trading and lending platforms should “come in, talk to us, and get registered.”

According to his calendar, FTX CEO Sam Bankman-Fried came and talked with him on March 29. “Do you feel like you’ve been cheated?” he was asked.

The SEC chairman replied:

I think we have been clear in this meeting … non-compliance will not work, the public will be hurt, but also we will continue on this dual path.

He added that if necessary, the SEC will “police in beating, going to court, putting the facts and the law in front of the judge”.

“It’s about a platform or an intermediary. It’s not like the New York Stock Exchange or Nasdaq,” Gensler stressed, adding that a handful of crypto lending and trading platforms are “coming” assets. He argued:

It’s another toxic combination where they take people’s money, they borrow against it, it’s not a lot of disclosure, and then they trade against their customers.

The chairman added that the SEC is interested in this platform but “Building evidence, building facts often takes time.”

Congressman Investigating Why Gensler Helped FTX on Legal Loopholes

After Gensler’s interview, Congressman Tom Emmer tweeted that his office had received a report alleging that the SEC chairman helped Bankman-Fried and FTX work through legal loopholes to gain a regulatory monopoly. “We are looking into this,” the lawmaker wrote.

SEC Chair Gensler Discusses Crypto Regulation After FTX Collapse - Says It's 'Toxic Combination'

Last week, four congressmen accused Gensler of “hypocrisy.” mismanagement of the SEC,” insists he refuses to practice what he preaches. This week, two lawmakers said they are “deeply concerned” that the SEC is enforcing the rules too fast, without sufficient feedback. Gensler has also been criticized for taking an enforcement-centric approach to regulating the crypto industry.

What do you think of SEC Chairman Gary Gensler and Congressman Tom Emmer’s comments? Let us know in the comments section below.

Kevin Helms

An Austrian Economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Image Credit: Shutterstock, Pixabay, Wiki Commons, lev radin

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