SEC chairman Gary Gensler announced the cryptocurrency regulatory framework will cover stablecoins, exchanges, and almost all decentralized exchange (DEX) platforms!
The SEC will not ban cryptocurrencies as China has recently done, according to the SEC chair. And the SEC’s focus is on investor and consumer protection rules, anti-money laundering regulations and tax laws.
The SEC will not ban crypto, but the U.S. Congress could…? “That would be up to Congress,” Gensler said of the crypto ban.
Regarding stablecoins, the SEC chair doubled down on his previous analogy comparing stablecoins to “poker chips” at a crypto “casino.” The $125 billion of stablecoins creates risks in the U.S. financial system. “[Stablecoins could] undermine traditional banking systems if it’s not brought inside the remit of banking.”
On whether cryptocurrencies are “security”, Gensler reiterated that “most” of the 5,000-6,000 existing cryptocurrencies does. Thereby, most of them are subject to regulation by the SEC.
SEC Coming for Stablecoins, Exchanges, DeFi Platforms
So, should all cryptocurrency exchanges be subject to SEC regulation? “Many of these projects are within the securities laws,” said Gensler. “We’re gonna use our authorities to try to get more of these projects and companies to register.”
Additionally, people use stablecoins within crypto exchanges “in part to avert laws around tax compliance and illicit activity,” according to Gensler. Moreover, in the past few years, crypto exchanges either chose not to register with the SEC. “Or they’ve stood up in Singapore or Malta or Hong Kong or other countries.” Gensler urges exchanges to formally apply for a license with the US SEC.
Moreover, the SEC chair stated for the first time that even decentralized finance (DeFi) platforms should be subject to SEC’s regulation.
“Even in the decentralized platforms, or so-called DeFi platforms, there is a centralized protocol,” said Gensler. “Those are the places where we can get the maximum amount of public policy.”
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