The chairman of the Securities and Exchange Commission said that investors need more protection in the cryptocurrency market, which he said is „rife with fraud, scams and abuse.“<\/b>
\nSILVER SPRING, Md. \u2014 The chairman of the Securities and Exchange Commission said that investors need more protection in the cryptocurrency market, which he said is \u201crife with fraud, scams and abuse.\u201d Gary Gensler, appointed by President Joe Biden to lead the body that regulates securities markets, listed several areas where crypto needed to be reigned in or regulated, particularly with regard to money laundering, sanctions, tax collection and extortion via ransomware. \u201cRight now, we just don\u2019t have enough investor protection in crypto,\u201d Gensler said in remarks to the Aspen Institute\u2019s forum on security. \u201cFrankly, at this time, it\u2019s more like the Wild West.\u201d Although the SEC has brought and won dozens of cases against fraudsters, Gensler said the agency needs more authority from Congress to regulate the crypto markets. Gensler has been viewed as receptive toward cryptocurrency and other new financial technologies after a stint as a professor at MIT, where he focused his research and teaching on public policy as well as digital currencies and blockchain, the global running ledgers of digital currency transactions. Beyond the problems, Gensler said innovation in digital currencies \u201chas been and could continue to be a catalyst for change in the fields of finance and money.\u201d Gensler opened his remarks by saying he was not speaking on behalf of the SEC or its staff, but that he personally believes that regulation of cryptocurrencies would fall under his agency\u2019s purview. Currencies such as the dollar or euro fulfill several key functions, Gensler said; they are a store of value, a unit of account and medium of exchange. By contrast, Bitcoin and other cryptocurrencies are for now mostly \u201chighly speculative\u201d investments. When Congress defined what a security was in the 1930s, Gensler said, one of those definitions was as an investment contract \u2014 when \u201ca person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.\u201d That definition, which Gensler says should apply to cryptocurrency, has been tested and reaffirmed by the Supreme Court. Gensler noted that his predecessor at the SEC, Jay Clayton, testified in 2018 that he believed ICOs, or initial coin offerings, were securities and that \u201cwe have jurisdiction, and our federal securities laws apply.\u201d Gensler said many crypto tokens are unregistered securities and don\u2019t come with market oversight or proper disclosures to educate investors. That leaves prices open to manipulation and investors unprotected, he said. \u201cThese products are subject to the securities laws and must work within our securities regime,\u201d Gensler said. \u201cIf we don\u2019t address these issues, I worry a lot of people will be hurt.\u201d<\/p>\n