SEC Chairman Gary Gensler issues new warning to crypto markets and platforms operating outside of regulations: report

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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler is issuing a new warning to the crypto industry.

Speaking at the code conference earlier this week, Gensler told attendees that cryptocurrency trading and lending platforms should be regulated, Bloomberg BNN reports.

Gensler says,

There are trading platforms and lending platforms where they cluster around these, and they not only have tens but hundreds and sometimes thousands of tokens on them. It’s not going to end well if it stays out of regulatory space.

The remarks follow Gensler’s testimony before the US Senate Committee on Banking, Housing and Urban Affairs earlier this month. The SEC chairman said cryptocurrency investors are vulnerable to scams and other illegal activity due to the lack of sufficient investor protection in the space.

Right now, we just don’t have enough investor protection in crypto-finance, issuance, trading, or lending. Frankly, right now it’s more like the Old West or the old world of the suspicious buyer that existed before securities laws were passed.

This asset class is rife with frauds, scams and abuse in some applications. We can do better.

Gensler has also argued that a significant percentage of players in the cryptocurrency space do not comply with existing regulations.

Right now, large parts of the crypto field are stuck on failing to operate within regulatory frameworks that protect investors and consumers, guard against illicit activity, and ensure financial stability.

Republican Senator Pat Toomey of Pennsylvania criticized Gensler’s approach to space after his testimony.

In a letter to the president, the lawmaker said investors in the new space need clear rules and guidance, rather than harsh enforcement and fines.

Coinbase CEO Brian Armstrong also slammed the SEC earlier this month after the regulator threatened to sue Coinbase if it launched a new loan product known as Lend. Armstrong accused the SEC of not being transparent and of “engaging in intimidation tactics behind closed doors.”

Gensler reportedly declined to comment on Armstrong’s remarks at the Code Conference this week.

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