- SEC Chairman Gary Gensler expressed his viewpoint that there’s no need for additional digital currencies in the market.
- Gensler’s comments came on the heels of the SEC’s lawsuits against major crypto exchanges Binance and Coinbase for operating unregistered securities exchanges.
The global digital asset market is abuzz following the U.S. Securities and Exchange Commission’s (SEC) recent lawsuits against Binance and Coinbase, both accused of running unregistered securities exchanges. In the wake of this regulatory action, SEC Chairman Gary Gensler made a pointed remark, opining that the market is not in need of more digital currencies. This comment has added fuel to the ongoing debate about the burgeoning cryptocurrency industry.
During a CNBC interview, Gensler argued that the market already possesses a digital currency — the U.S. dollar. He also named the Euro and the Yen as forms of digital currencies, stressing that what these markets need is digital investment, not additional currencies. His statements followed closely behind the SEC’s lawsuit against Coinbase, one of the nation’s leading crypto exchanges.
The SEC alleges Coinbase did not provide essential protections to investors, such as measures to prevent fraud and manipulation, adequate disclosures, and safeguards against potential conflicts of interest.
Digging deeper, Gensler elucidated that the commission has discovered a concerning trend among crypto businesses: their models appear to be fundamentally based on non-compliance with securities laws. He mentioned that the SEC has invited these companies to fall in line with compliance requirements, yet many seem to adopt a rebellious,
“catch us if you can”
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Gensler also pointed out that crypto exchanges are combining a multitude of functions, which, from a regulatory standpoint, is problematic. He alluded to the potential outrage if the public became aware that the New York Stock Exchange was concurrently running a hedge fund against them — a situation somewhat analogous to current operations within certain crypto exchanges.
In a glimmer of positive news amidst this fraught environment, Gensler highlighted that constructive conversations have occurred with several crypto businesses. Bringing them into compliance is a crucial task for the SEC. Indeed, some success has already been noted: one cryptocurrency entity has taken steps to register with the commission over the last fortnight.
It is developments like these that may gradually reshape the landscape of this dynamic, yet contentious industry.
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