Gary Gensler, the chairman of the SEC, shared his opinions on how cryptocurrency markets should be handled in an opinion piece that was published in the Wall Street Journal on August 22. He compared it to the auto sector and argued that, just as the safety requirements for the auto industry haven't changed in the last 60 years, neither have the investor protection rules.
According to Gensler, there is no justification for giving digital assets a higher status. They ought to be handled more like capital markets. He also mentioned how the collapse of the crypto loan sites this year hasn't hurt investors much. Due to the freezing of their funds, investors are forced to knock on the door of the court.
The United States Securities and Exchange Commission (SEC) is eager to apply securities regulations to the cryptocurrency industry. In this context, the SEC has been engaged in an 18-month legal struggle with blockchain firm Ripple.
The $100 million Settlement of the cryptocurrency lending company BlockFi earlier this year is mentioned by Gensler. According to the head of the SEC, the problem wasn't with the loans BlockFi had taken out. Instead, it was what it did with the assets that the client lent it. The business further asserted that the SEC failed to provide investors with the essential disclosures.
He goes on to add that the laws governing lending are nothing new and also apply to services that provide loans in cryptocurrency. He committed to pressuring lending platforms for cryptocurrencies to get in touch with the SEC. According to Gensler, this would be more advantageous for investors and the Bitcoin industry.