update 15 September 2021

US SEC’s Gary Gensler to Face the Senate Banking Committee for Crypto Regulation Discussions

The U.S. Senate expects the Securities and Exchange Commission (SEC) Chairholder, Gary Gensler, to appear before them today. According to CNBC, U.S. lawmakers will grill him over the regulation of cryptocurrencies. Moreover, the senate questions the SEC for taking a longer time than expected to endorse the monitoring of cryptos.

The Senate Queries the SEC Leader’s Plans

Gensler will face leaders from U.S. political parties regarding Stablecoins, Bitcoin, and other digital assets. According to reports, Gensler may ask for support from lawmakers in a bid to regulate crypto trading and lending platforms. Also, Senator Pat Toomey will question Gensler heavily on why SEC is taking long to support the regulation of cryptos.

Gary Gensler had an obligation to support crypto regulations early enough. Having not satisfied this expectation, he will face a committee of lawmakers to question him about this issue in the Senate.

He claimed that some parts of the crypto market are functioning outside SEC’s set guidelines. He added that SEC doesn’t “have enough investor protection in crypto finance, issuance, trading or lending.” Lastly, he warned that the SEC is striving to empower the existing authorities. Also, the Commission may be seeking support from Congress to get jurisdiction for regulating policies for cryptos.

What Will be the Fate of Cryptocurrencies Under the SEC?

Concerning regulation cryptos, there are no proper guidelines that are in place for universal sanctioning. Earlier this month, the European Securities and Markets Authority (ESMA) said that even though the innovation behind cryptos is commendable, they are still quite unsafe. The authority was pointing out environmental concerns since the process of crypto mining is not yet eco-friendly.

If the Senators recommend crypto regulation, the operation of crypto markets may experience unforeseen changes. Many governments are figuring out how to join the new era of digital currencies. That’s how they should maintain the order of finance in their countries.

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The E.U. has tried to regulate Cryptos by stating that transactions should follow the 5th AML Directive. This document contains the E.U.’s anti-money laundering regulations. Singapore has also signed a bill (Blockchain and Cryptocurrency Regulation, 2020) to regulate cryptos and accelerate their adoption. In 2017, Japan also legalized cryptos under the Payment Services Act.