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SEC Boss Gary Gensler Says We Don't Need More Digital Currency

In short: The US SEC has filed lawsuits against Binance and Coinbase, the two major crypto exchanges, claiming that the firms failed to register as crypto brokers, exchanges and clearing agencies. SEC Chairman Gary Gensler said that the regulator aims to prove that at least one crypto asset is indeed a security. Gensler stressed that the crypto sector must comply with basic public policy standards to avoid risks such as fraud and manipulation. He also stated that more digital currencies are not necessary as digital dollar, euro, and yen already exist.

Our quick analysis:
The US Securities and Exchange Commission (SEC) seems to have a bone to pick with the crypto assets industry, as Chairman Gary Gensler makes it clear in a recent interview with CNBC’s Squawk on the Street with Jim Cramer.

In the interview, Gensler noted that the SEC wants to prove that at least one of the 200 crypto assets listed on Coinbase and Binance is a security that needs to be registered. He asserted that all digital assets, except for Bitcoin, are securities, and such assets must register with the commission.

While the public can invest in any assets, Gensler emphasized that proper disclosures must be in place to prevent counterfeiting, scams, or other fraudulent activities.

Gensler went further to state that there is no need for more digital currency because they already exist in the form of the US dollar, the euro, and the yen, among others.

Gensler referred to the lawsuit against Binance and Coinbase as a "straightforward securities case, but it's in the context of crypto." He accused the crypto sector of mostly being non-compliant with public policy, including disclosure and avoiding conflicts.

He warned that the industry risks collapse like a house of cards if it fails to come into compliance with basic public policy, proper fund segregation, avoiding conflicts, and guarding against fraud and manipulation.

The SEC's recent aggressive approach towards the crypto industry is evident in its recent enforcement actions against various firms that violate securities laws. Binance and Coinbase, two of the industry's largest cryptocurrency exchanges, were sued within 24 hours for violating securities laws.

In conclusion, Gensler's stance on cryptocurrency has raised concerns for stakeholders in the sector. More clarity and regulatory guidance are needed to ensure compliance and foster a conducive environment for the crypto industry to thrive.

Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.

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