Gensler continues to play his scratched securities record on crypto

Gary Gensler, chairman of the Securities and Exchange Commission (SEC), wants to team up with the Commodity Futures Trading Commission (CFTC), in order to regulate crypto exchanges and trading platforms.

Gensler spoke at an event hosted by the University of Pennsylvania Carey Law School yesterday, and he continued with the line that most crypto projects are securities, and that the watchdog agencies needed to protect investors from them.

In a quote from Bloomberg, he stated that a lot of regulation was needed for exchanges “because retail investors are currently vulnerable to scams and market manipulation.” He also thought that the SEC could work with the CFTC in order to regulate where securities and commodities were entwined.

Gensler has not budged one inch from his view on most crypto companies being securities. Many neutral observers may agree with him on this. However, this is not the point. The point is that many investors globally are running to crypto in order to escape the traditional financial system that Gensler oversees.

Yes, regulation is needed in crypto. But it needs to be fair and must not blunt and dampen the amazing innovations going on in the crypto sector. Gensler talks about protecting investors, but at the same time he wouldn’t be happier than to hand out huge fines left right and centre, and thereby help to destroy what retail investors have put into these companies.

He wants to put heavy handed regulation in place that would make the crypto sector look more like the banking sector. It’s all about control, and oversight, and rigging of markets in order to keep the large financial institutions happy.

Working with the CFTC would be to bring in an organisation that is accused by some of standing by as banks are rigging the silver market in order to suppress the price. 

Whether or not this kind of behaviour is going on, it simply cannot be argued that existing financial markets are safe places to be for the average retail investor. Keeping your wealth in the bank is one of the very worst places for it to be, as inflation of anywhere between 10 to 20% is wiping out purchasing power fast.

Investors are forced to be in crypto as there really isn’t an alternative to protecting your wealth anywhere in traditional finance. Expecting regulatory watchdogs, who have spent their entire existence in traditional financial markets, to have any sort of clue on how to regulate crypto, is frankly a very distant long shot.

The long-suffering retail investors are those that the SEC and the CFTC are supposed to be protecting. Could it be that these agencies come up with fair and supportive rules for the crypto industry? Please forgive the pessimism, but the sun might freeze over first …

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.