U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler talks with Senator Elizabeth Warren (D-MA) prior to affirming prior to a Senate Banking, Housing, and Urban Affairs Committee oversight hearing on the SEC on Capitol Hill in Washington, U.S., September 14, 2021.
Evelyn Hockstein|Reuters
WASHINGTON– Securities and Exchange Commission Chair Gary Gensler on Wednesday pressed back versus criticism that the company stopped working to impose guidelines avoiding impropriety by cryptocurrency companies, such as the illegal trading that caused the death of crypto exchange giant FTX.
Gensler informed Yahoo Finance in an interview that the SEC has actually brought more than 100 enforcement cases in the crypto area, straight tough legislators’ concerns about the company’s oversight.
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In November,Sen Elizabeth Warren, D-Mass, contacted the SEC to “suit up” in the wake of the FTX failure, arguing the company has “fallen behind” the crypto market. Members of the House Financial Services Committee likewise contacted Gensler to respond to concerns about what he understood leading up to the FTX collapse.
“We’re already suited up,” Gensler informed Yahoo Finance.
The SEC chief stated cryptocurrency companies must be held accountable for compliance with existing guidelines.
“You might think of them as the casinos wherein the investing public is looking for a better future,” Gensler stated. “And because most of these tokens are securities, that means that the … casinos need to come into compliance with our time-tested laws.”
“Their business model right now is offering the public, they say, an interest return in crypto … and then possibly trading against their customers, trading ahead of their customers, lending that out,” he stated. “Anywhere else in finance, these conflicts are not allowed and they’re separated out.”
Former FTX CEO Sam Bankman-Fried’s company Alameda Research utilized billions of dollars in FTX client possessions for trading, a practice that Gensler stated breaks a federal statute. The business declared insolvencyNov 11, and Bankman-Fried stepped down as CEO, as the company dealt with a liquidity crisis.
Bankman-Fried has actually rejected dedicating scams.
Lawmakers have actually observed that federal oversight of FTX was obstructed due to the fact that the business is headquartered in the Bahamas.
Gensler informed Yahoo Finance that the SEC has actually effectively hindered other suspicious crypto company activities. He mentioned charges versus Poloniex and Coinbase for unapproved operations as examples.
“We brought actions against crypto lending platforms including BlockFi, and we will continue to be a vigorous securities regulator, but I really do suggest to these intermediaries, these storefronts, these casinos, if you wish, to come into compliance, work with the SEC to get into compliance, disaggregate these businesses,” he stated.
Gensler stated the SEC would take more enforcement actions if cryptocurrency exchanges will not comply, however he did not elaborate on what those would be.
“We can use some exemptive authority to tailor things … but it’s not to drop the basic protections: separating out these businesses into a separate exchange,” he stated.
