US SEC to Partner With the CFTC on Crypto Regulations

#Ripple #XRP

The Chairman of the US Securities and Exchange Commission (SEC) – Gary Gensler – reiterated the agency’s plans to exercise greater regulatory oversight on the cryptocurrency market to protect investors from fraud.

Additionally, he revealed that the SEC and the Commodity Futures Trading Commission (CFTC) will work together to supervise the operations of digital asset trading venues.

The SEC and the CFTC Combining Efforts Because of Crypto

The two entities are America’s top financial watchdogs. However, there are significant differences between their responsibilities as the SEC regulates the securities market while the CFTC regulates commodities and derivatives. According to Gary Gensler, though, the agencies will join forces in the near future to implement enhanced supervision of the crypto industry, especially digital asset platforms.

The government official said the SEC intends to register and regulate cryptocurrency exchanges and to work to separate the custody of assets to minimize risks for investors. As stated before, Gensler advocated for further protection for those dealing with the asset class:

“These crypto platforms play roles similar to those of traditional regulated exchanges. Thus, investors should be protected in the same way.”

Additionally, he compared crypto platforms to alternative trading systems, which are used in equity and fixed income markets. In his view, though, the latter are used mainly by institutional investors, while exchanges “have millions and sometimes tens of millions of retail customers directly buying and selling on the platform without going through a broker.”

With that said, Gensler remarked that the SEC will seek ways to treat cryptocurrency trading venues more like retail exchanges.

The official touched on stablecoins, too, opining they present concerns to the financial system. He argued that many criminals employ the products in their illegal operations.

“Crypto-to-crypto transactions allow users to skirt the traditional banking system, making it harder to track money laundering, taxes, and compliance,” he alerted.

In conclusion, Gensler added that Washington’s regulators have long had supervised financial markets in an effective way. He raised hopes that the trend will continue with the crypto industry, too:

“We ought to apply these same protections in the crypto markets. Let’s not risk undermining 90 years of securities laws and create some regulatory arbitrage or loopholes.”

Gary Gensler, Source: CNBC

Gensler’s Expectations After Biden’s Executive Order

At the beginning of March, President Joe Biden signed the first-ever executive order on digital assets. The long-awaited directive became food for thought for many prominent individuals and government officials. Among them was Gary Gensler.

The SEC’s Chair said he looks forward to partnering with “colleagues across the government” to accomplish certain goals in the sector. Similar to the White House’s stance, he outlined customers’ protection and safeguarding against illicit activities as priorities.

OhNoRipple via https://www.ohnocrypto.com/ @Dimitar Dzhondzhorov, @Khareem Sudlow