SEC Chairman Outlines Plan to Regulate Crypto Trading in a Video
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"When you trade on a stock market, you have certain protections," he explained.
SEC Chairman outlined -
The SEC chairman detailed, remarking that crypto platforms service "millions, sometimes tens of millions" of retail customers who are buying and selling crypto assets directly through a broker.
"There are so many retail clients on cryptocurrency platforms. With customers trading, we must ensure that those platforms provide the same level of security as traditional security platforms."
Gensler highlighted how he has asked the staff to "work directly with the platforms to get them registered and regulated," reiterating his plan to "best ensure" the assets' protection.
Risk Associated With Crypto Exchanges
Gensler then brought out another risk concern associated with cryptocurrency exchanges. "Unlike traditional securities exchanges, crypto trading platforms also may act as market makers," he explained. "When you sell your tokens, one of the platforms may actually be buying on the other side," the SEC chairman said, adding:
"Stock exchanges don't do this; they don't serve as their own market makers because that creates inherent conflicts of interest. Thus again, I’ve asked staff to consider whether it would be appropriate to segregate the market-making functions on these crypto platforms."
In closing, the SEC chairman emphasized,
"There's no reason to treat the crypto market differently just because a different technology is used. That would be like saying drivers of electric cars don't need seat belts because they don’t use gas."
On Twitter, some people criticized Gensler's video. Some accuse Gensler of wasting time and energy advertising himself rather than managing the crypto business. Others criticized the SEC for taking enforcement-focused measures to regulate cryptocurrency assets.