U.S. bitcoin traders not protected, crypto space to benefit from more regulation, says SEC Chairman Gensler
(Kitco News) There are some apparent gaps in the regulatory framework surrounding crypto assets, Securities and Exchange Commission Chairman Gary Gensler said during the third House hearing focused on GameStop.
"Our authority is around securities and around asset managers and products that might invest in these cryptocurrencies," Gensler said during his testimony before the House Financial Services Committee. "Right now, the exchanges trading in these crypto-assets do not have a regulatory framework either at the SEC or CFTC. There is no market regulator, and thus there is really no protection against fraud or manipulation."
Bitcoin trading on large crypto exchanges is one area Gensler specifically highlighted as something he'd like to work on in the future.
"There is a lot of authority that SEC currently has in the security space, and there are a number of cryptocurrencies that fall within that jurisdiction. But there are some areas, particularly bitcoin trading on large exchanges, [where] the public is currently not really protected. That would be one area I would highlight," he said.
Gensler added that he would look forward to working with Congress on developing investor protection regulation.
"If one trades bitcoin in America today, there is no investor protection regime that really protects as I think would be appropriate around these exchanges," he said at the hearing. "There are things that we can do better and get done at the SEC. But I also look forward to working with Congress if there is the desire to fill some gaps. As I said earlier, [those being] crypto exchanges."
Gensler did highlight that it is only up to Congress to initiate the regulatory expansion while noting that the $2 trillion crypto-asset market will benefit from greater investor protection.
"It is only Congress that could really address it. It would be good to consider whether to bring greater investor protection to the crypto exchanges," he said. "That could instill greater confidence [in crypto]."