SEC Chair Recommends “One Crypto Rule Book” To Prevent Loopholes

SEC Chair Gary Gensler on Friday said financial agencies in the U.S. should share “one” crypto rule book in order to prevent loopholes due to fragmented regulatory structure. The recommendation comes after the bipartisan crypto bill proposes the Commodity Futures Trading Commission (CFTC) for crypto oversight.

In fact, Gary Gensler is in discussion with his counterparts at the CFTC to ensure satisfactory protection and transparency regarding the trading of digital assets. Moreover, SEC Chair Gensler claims that most digital tokens are securities.

SEC Chair Urges Shared Crypto Oversight With the CFTC

The SEC and the CFTC have never worked in tandem earlier. The SEC oversees the securities industry and the CFTC regulates the derivatives markets. However, cryptocurrencies led both agencies to have oversight of the crypto market.

As a result, the regulatory burden has increased significantly on the crypto market, along with rising penalties. As per data by crypto analytics company Elliptic, U.S. regulators have collected $3.35 billion in crypto enforcement actions since 2008.

SEC Chair Gary Gensler has always called for a strict crypto oversight and registration of crypto platforms with the SEC. Moreover, he was working on a memorandum of understanding with the CFTC in which the SEC has jurisdiction over platforms listing tokens that are deemed securities.

However, the bipartisan crypto bill by US senators Kirsten Gillibrand and Cynthia Lummis proposed most digital assets resemble commodities rather than securities. It put crypto oversight in the hands of the CFTC, potentially reducing the SEC’s influence over digital assets.

Gary Gensler believes a shared crypto rule book will better protect investors against fraud, front-running, and manipulation, as well as provide transparency. He told Financial Times:

“I’m talking about one rule book on the exchange that protects all trading regardless of the pair — [be it] a security token versus security token, security token versus commodity token, commodity token versus commodity token.”

In January, CFTC’s Chair Rostin Behnam stated that digital tokens qualify as commodities, including Bitcoin and Ether. The CFTC is better aligned to manage the crypto market.

Gary Gensler Believes the Crypto Bill Undermines Protections

As the crypto market reels under massive pressure, the SEC Chair warned that the crypto bill undermines market protections. He believes most cryptocurrencies are unregistered securities that harm investor protection.

The SEC has already filed lawsuits against crypto companies, including Ripple. Moreover, the SEC is investigating Binance’s initial coin offering of BNB over a violation of securities law.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

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