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SEC Chairman Threatens Action Against Unregistered Crypto Platforms

Protect investors from unregistered crypto platforms

Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), threatened during a congressional hearing on Wednesday to take action against companies that are not registered with her.

The statement came in response to questions from Representative Steve Womack, who expressed displeasure with what he perceived to be the SEC’s continued failure to create a set of regulations for cryptocurrencies.

With the increasing development of crypto platforms, there are many reasons that make registration essential. Gary Gensler explains in particular that it is the role of the regulatory authority for ensure that investors are safe in their transactionsand for this it is necessary that there is a certain regulation and transparency in these exchanges.

In his statement, the authority’s chairman alluded to the sudden collapse last week of Terra’s algorithmic stablecoin, the USTand native token, the LUNA :

“There is a crypto ecosystem that has gone from $50 billion to near zero just in the last three weeks. They are highly speculative, volatile and the public is not protected. »

It’s exactly the same process as in France where platforms must register with the Financial Markets Authority (AMF) to offer their services on French territory legally, and investors can hope to gain cause in a claim.

This threat from the Chairman of the SEC should not be taken lightly, as it may lead to serious penalties for companies that violate these regulations.

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SEC faces legal uncertainty surrounding cryptocurrency platforms

Alongside these threats, the SEC has already taken action against unregulated platforms. It identifies to date over 80 enforcement actions against virtual asset platforms. Recently, it notably added misleading crypto platforms to its list of public alerts.

For the American stock market policeman, the rise of cryptocurrencies constitutes a new risk for investors that must be taken seriously. Gensler argued Wednesday that sanctions and restrictive actions are well within the jurisdiction of the authority.

In reality, it’s not that simple. Even if the SEC wishes to appropriate the regulation of the cryptocurrency sector, this is not necessarily its role: it all depends in which asset category the Bitcoin is classified (BTC). Historically, the US authority has not specified which virtual assets are considered titlescompared to some that she believes could be considered goods.

The classification determines the competent authority. If the assets are considered securities, this falls within its jurisdiction; if they are considered commodities, this falls under the jurisdiction of the Commodities Future Trading Commission (CFTC), which is a US federal agency responsible for regulating commodity exchanges. And yet, Gary Gensler has called Bitcoin a commodity during his congressional hearing on Wednesday

“Bitcoin may be a commodity token. »

The legal vagueness surrounding the regulation of virtual assets weighs on the many companies operating in the cryptocurrency sector. Of the companies fined or subpoenaed by the SEC, some have expressed their frustration about the various ill-articulated laws between regulatory authorities, and explained thatthey did their best to comply.

To remedy this problem, the chairman of the SEC last month confirmed his desire to create a new registration and regulatory process for cryptocurrency supervised by both the SEC and the CFTC. A process overseen by both bodies could monitor both crypto securities and crypto products.

👉 Read – SEC Director Says Exchanges Won’t Survive Without Regulation

Source: Decrypt

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About the Author : Timothy Bernines

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Passionate about the world of investment, cryptocurrencies have been attracting my attention for a few years now. Having a major interest in the fields of new technologies and Web 3, this is why I naturally wanted to write articles on Cryptoast, in order to contribute to the democratization of this universe in society.
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