FX.co ★ Increasing control over cryptocurrency

Recently, Gary Gensler - Chairman of the Securities and Exchange Commission (SEC) - pledged to strengthen regulation and improve investor protection, addressing the $2 trillion cryptocurrency market.Gensler emphasized that the crypto industry is full of innovation, but there is also a lot of fuss. Accordingly, many projects may fail.

This was the introduction of Gensler's speech before he outlined several initiatives to improve regulation and protect investors. One of the main messages was Gensler's promise to register and regulate cryptocurrency platforms in the same way that exchanges are regulated.

Among the leading crypto platforms, five of them account for 99% of all crypto trading, and only two platforms account for 80% of all trading in the crypto industry. These platforms probably trade securities. A typical trading platform has dozens of tokens.

According to Gary Gensler, these crypto platforms have a role similar to that of traditional regulated exchanges. Thus, investors should be protected.

Gensler also wants to cooperate with the Commodity Futures Trading Commission (CFTC).

Gensler said that stablecoins - digital assets backed by fiat currencies - are also part of the legal and regulatory framework. The $183 billion market is a concern, especially when it comes to illegal activity, financial stability, monetary policy, and investor protection.

The last covered subject was crypto-tokens. Most crypto-tokens are associated with a group of entrepreneurs collecting money from the public in anticipation of profit.

Registration is key, the SEC chairman reiterated, stressing that many entrepreneurs collect money from the public by selling crypto-tokens.

It is important that crypto-tokens are registered with the SEC. Crypto-token issuers, which are securities, must register their offers and sales of these assets with the SEC and comply with disclosure requirements.

Gensler urged policymakers to stick to the already effective scheme for regulating financial markets.

Gensler's speech on cryptocurrencies was delivered less than a month after US President Joe Biden signed an executive order urging government agencies to identify the risks and benefits of cryptocurrencies, as well as the dangers associated with the creation of a central bank digital dollar.

US Treasury Secretary Janet Yellen will also be scheduled to comment on digital assets on Thursday.