US SEC Chairman Says He Is Neutral About Crypto But Not About Investor Protection

SEC Chair Gary Gensler talks about his position in regard to crypto technology and the risks involved in their investments.

For years, cryptocurrencies have amassed a massive following by investors and traders across the world. As years passed, more crypto projects popped up in the space. There are now thousands of cryptos in the market.

With this popularity, acceptance and adoption have increased, and even mainstream financial institutions and investment firms are now venturing into the crypto space. However, the issue of regulation has remained a hard nut to crack for many governments, with some opting to ban cryptos altogether.

What The SEC Chairman Thinks About Cryptos And Regulation

In the case of the US, the SEC (Securities and Exchange Commission) is tasked with handling such matters. During a recent interview with CNBC’s Squawk Box, SEC Chairman Gary Gensler said,

“I’m neutral about the technology, but I’m not neutral about the investor protection. These are highly speculative assets where there are thousands of tokens, most of which have attributes of securities, meaning there’s a group of sponsors and entrepreneurs raising money from the public.”

He went on,

“Just like any field of venture capital in new projects, many projects fail.”

About investor security, Gary said,

“It’s important that the public get the disclosure and understand the risk. There’s very significant risk in this field.”

“I’m neutral about the technology but not about the investor protection,” says SEC Chair @GaryGensler on #crypto. “There are thousands of tokens, most have attributes of securities. Just like any field of new projects, many ventures fail. There’s significant risk in this field.” pic.twitter.com/hWVZehXK40

— Squawk Box (@SquawkCNBC) July 21, 2022

It’s worth noting that way before clinching the position as the SEC Chairman, Gary Gensler once lectured at MIT about cryptocurrencies and blockchain technology, so it’s safe to say that he knows his stuff when it comes to these new technologies.

SEC To Formulate Regulatory Policies For Crypto Investment Firms

In another clip, Gary talked about the challenges facing investors in regard to the new breed of investment firms that take their money, promise huge returns, and use the money to re-lend to other entities. Just a few weeks ago, a number of such firms/platforms collapsed and even filed for bankruptcy, leaving investors with massive losses. Some of them include Voyager, 3AC, and Celsius.

According to Gary Gensler, while they operate in the largely unregulated crypto market, many of these firms can be considered investment firms. It, therefore, goes without saying that the US SEC would want to come up with a framework to ensure investors are protected.

He said,

“We’re going to continue to try to work with the industries and get these firms properly registered under the securities laws and protect the public.”

“Many of these firms like BlockFi might be investment companies,” says SEC Chair @GaryGensler on #crypto firms. “We’re going to continue to try to work with the industries and get these firms properly registered under the securities laws and protect the public.” pic.twitter.com/oMSrdRVw4K

— Squawk Box (@SquawkCNBC) July 21, 2022

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