Gensler calls for tighter oversight of the cryptocurrency industry

To safeguard investors, regulation of the digital asset space should be strengthened, but the U.S. Securities and Exchange Commission (SEC) should not oversee the market alone. This was stated by the agency’s head, Gary Gensler, on Yahoo Finance.

In the official’s view, the public stands to gain from tougher oversight of the digital assets space, particularly when it comes to supervising providers such as lending platforms, exchanges and broker-dealers.

«There are many cryptocurrency platforms that set deposit-yield rates from 4% to 20%. If you’re an investor, you should wonder whether this is too good to be true. You should consider how this is possible and what risk these offers entail», — said he.

Gensler reminded of the basic rule: if a token is sold publicly and investors’ profits depend directly on the issuer’s efforts, it will be treated as a security. At the same time, he noted that such digital assets do not necessarily have to be regulated as stocks, but basic consumer protections should be ensured.

«You may take risks, but the person who earns money and sells you the asset must provide all information necessary to make an informed decision», — added he.

The head of the SEC emphasized that the agency has the ability to craft a regulatory framework optimal for protecting investors, but the main risks stem from unregulated platforms.

Gensler confirmed that the Commission plans to regulate the cryptocurrency market in the United States jointly with the CFTC. According to him, the agency is closely watching service providers and tokens of various classes, but for effective oversight they should be separated.

«We are engaging with industry representatives on compliance and modifications to certain rules. We are also monitoring tokens, including stablecoins. Separately, we are discussing various aspects with banking regulators and our colleagues at the CFTC, because some assets like Bitcoin are not securities», — said the head of the SEC.

Back in June 2022, Gensler said that his agency was considering Bitcoin as a commodity.

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