Cryptocurrencies had a great year in 2021. In this period, we have seen the market go from being classified as a billion-dollar economy into a trillion-dollar economy. Aside from that, cryptocurrencies are gaining visibility in the mainstream world with, for example, El Salvador's adoption of Bitcoin as the official digital currency. As a result, investors are looking for the "new Bitcoin" on the market, hoping to find a great alternative in so-called altcoins. Unfortunately, many traders value an altcoin exclusively…
The current and former chairmen of the Securities and Exchange Commission show little partisan disagreement. Earlier today, Democrat chairman Gary Gensler and his Republican predecessor Jay Clayton called on exchanges to register with the commission. Both justify their actions by the motivation to protect investor concerns, as Gensler commonly puts it.
Register Or Else, Say SEC Chiefs
The SEC chiefs aired their thoughts during a Fireside chat at the Digital Asset Compliance & Market Integrity Summit on Wednesday. The event was staged by Solidus Labs, a crypto market surveillance company.
During the event, Gensler said that crypto trading platforms have an important place in public policy and investor protection – whether centralized or decentralized.
Gensler has kindly asked industry participants to come forward in the past, but it would seem his patience is wearing thin. Today, he said they would be forced to “use the enforcement arm” on exchanges unwilling to cooperate. Only entities that register will face no lawsuit, which Gensler calls “a better approach for these platforms.”
The largest US cryptocurrency exchanges – including Coinbase, Kraken and FTX – do not have security exchange registrations. Much debate still exists on the relationship between cryptocurrencies and securities. However, Gensler believes they are mostly the same thing, with few exceptions.
Clayton agreed with Gensler’s view on exchanges, saying that current industry members must work harder to comply with securities law. He added that there are some players who consciously chose to disregard these laws while he still served.
“In this marketplace, there were a lot of people who…thought they could throw a fastball by the regulators and decided that they were going to take their chances of pushing the regulatory envelope with the hope that regulation would come in that direction,” he said.
Similar to what Clayton suggested, Coinbase recently put forth their own digital asset policy proposal, recommending rules for crypto. The exchange has run into hot water with the SEC in the past, having an awaited lending product shut down by the commission. Brian Armstrong has even called them out, saying they’ve continuously failed to provide clear industry guidelines.
After today’s discussion, industry participants said they felt no more informed about how to comply than when they came in. According to Perianne Boring, spectators were literally looking around asking confused whether to register as securities or commodities exchanges.