Recently, Gary Gensler, the chairman of the SEC has reportedly said that a crackdown on the crypto industry is inevitable in the wake of the latest market crashes.
According to Gary, exchanges must ensure the segregation of customer and company funds and make the records publicly available for open scrutiny
The commission has also been actively hiring professionals for its crypto enforcement unit while also putting the stablecoin under heightened regulatory scrutiny
To lose its grip on the crypto industry and is willing to regulate with the same norms as that of the traditional stock markets. Recently, Gary Gensler, the chairman of the SEC has reportedly said that a crackdown on the crypto industry is inevitable in the wake of the latest market crashes.
Gary Gensler who has been a successful investment banker is of an opinion that government agencies are bound to go after those cryptocurrency players that are not compliant with the rules. Gary said,
“The runway is getting shorter. The casinos in this Wild West are non-compliant intermediaries.”
This is a direct comparison of cryptocurrency exchange platforms with casinos and the crypto industry with the wild west. The SEC chair also said that the crypto exchanges releasing their proof-of-reserves are of no value as it does not depict the real picture of the total liabilities of the exchange.
“Proof of reserves is neither a full accounting of the assets and liability of a company nor does it satisfy segregation of customer funds under the securities laws.” said, Gary Gensler.
According to Gary, exchanges must ensure the segregation of customer and company funds and make the records publicly available for open scrutiny. Apart from that, he insisted the crypto industry should adapt to the time-tested compliant mechanism as mere proof-of-reservers are not enough for the customers to trust their process.
This is to note that SEC is tedious working towards regulating the cryptocurrency space by registering them with SEC for trading securities. SEC is also in a lawsuit against Ripple, a global payment blockchain network, citing the unauthorized trade of $1.3 billion worth of securities. The commission has also been actively hiring professionals for its crypto enforcement unit while also putting the stablecoin under heightened regulatory scrutiny.
Also, Read - Palau Collaborates with Ripple to Launch a National Stablecoin
