According to SEC Chairman Gary Gensler, the cryptocurrency market should not be treated any differently from other capital markets. Gensler urged cryptocurrency trading and lending platforms to "come in and talk to SEC staff," noting that "the SEC will serve as the cop on the beat." Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), wrote an opinion piece on how crypto assets ought to be governed that was published in the Wall Street Journal on Friday. He described:
There’s no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology.
Recent market developments demonstrate the importance of crypto firms adhering to securities laws, according to Gensler. "Some cryptocurrency lending platforms have frozen their investors' accounts or filed for bankruptcy in recent months. These investors must wait in line at the court when filing for bankruptcy. No matter the financial product, whether it be an app, lending platform, cryptocurrency exchange, or decentralized finance (defi) platform, the SEC chairman emphasized that:
Across decades of cases, the Supreme Court has made clear that the economic realities of a product — not the labels — determine whether it is a security under the securities laws.
While acknowledging that “There are costs of complying with securities laws, just as there are costs to car makers of adding seat belts,” the SEC chairman pointed out that “there is a path forward.”
Gensler continued, stressing that "getting these platforms into compliance with the securities laws will benefit investors and the crypto market," that he encourages crypto trading and lending platforms "to come in and talk to SEC staff." The SEC's head declared:
In the meantime, the SEC will serve as the cop on the beat. As with seat belts in cars, we need to ensure that investor protections come standard in the crypto market.
Gensler recently outlined what can be anticipated in terms of cryptocurrency regulation from the SEC. He has received harsh criticism for trying to regulate the cryptocurrency market primarily through enforcement. The head of the SEC added that while bitcoin is a commodity, the majority of crypto tokens have characteristics of securities and foresaw a large number of them failing.