US SEC Chairman: Cryptocurrency market will not remain outside the regulatory scope for too long

Cailian Press (Shanghai, editor Ale) reported that Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), said in an interview with the media on Wednesday (September 1) that the crypto market would find it difficult to survive outside the U.S. regulatory framework.

Gensler was a professor of global economics and management practice at the MIT Sloan School of Management. He has conducted research and taught on blockchain technology, digital currency, financial technology, and public policy, and has a certain authority in this field.

Gensler said, "Crypto assets are no different than other assets when it comes to public policy needs such as protecting investors, preventing illegal activity, and maintaining financial stability. Cryptocurrencies, like assets, should fall under the jurisdiction of the U.S. SEC."

Gensler said that although crypto trading is now popular, without a regulatory framework, the industry may eventually lose public trust. Professor Robert Merton, winner of the 1997 Nobel Prize in Economics, also once gave a similar speech. Professor Merton said, "Trust is the foundation of finance, but technology itself does not generate trust."

"History has told you it doesn't last long outside (outside the regulatory perimeter)," Gensler said. "Finance is all about trust. Whether this $2 trillion industry survives the next five to 10 years will depend on whether it is included in the public policy framework." The cryptocurrency market had a market value of more than $2.1 trillion on Wednesday, according to Coinmarketcap data.

Gensler said that it is particularly important to oversee decentralized finance (DeFi) platforms, but regulation is particularly difficult because there is no centralized broker. But he pointed out that DeFi "is not really a new concept" and that these platforms do in fact "have a certain degree of centralization."

Gensler reiterated that he wants crypto trading platforms to register with the SEC because many cryptocurrencies could be considered securities. “Come in and talk to us.”

Capitol Hill has held hearings for months on how to better monitor the nascent multi-trillion-dollar market, where assets face wild price swings.

Gensler said last month that "the cryptocurrency space is more like the 'Wild West' and we need additional authority from Congress to prevent crypto asset platforms from falling into regulatory gaps. We also need more resources to protect investors in this industry."

Concerns about cryptocurrencies are mainly that they are susceptible to fraud and market manipulation. A report released by the U.S. Federal Trade Commission (FTC) earlier this year said that between October last year and March this year, losses from cryptocurrency scams exceeded $80 million, mostly from scams targeting small investors on social media.