Securities and Exchange Commission (SEC) Chairman Gary Gensler testified before the Senate during a session of the SEC’s fiscal year 2024 budget subcommittee. During his intervention, he raised important issues related to the regulation of the crypto sector, qualifying certain aspects of “Wild West”.
SEC Chairman Gary Gensler testifies in Senate
The fate of cryptocurrencies is currently being played out in the legal arena. Coinbase at the forefront, representing the entire crypto ecosystem in the United States in an ongoing lawsuit against the SEC. Meanwhile, Ripple has won part of its legal fight, but the SEC doesn’t seem to have said its last word.
During a session of the SEC’s fiscal year 2024 budget subcommittee, Chairman Gary Gensler testified before the Senate, and the issue of crypto regulation was at the heart of his speech.
SEC Chairman Gary Gensler opened his testimony by highlighting the risks investors take in the crypto sector.
“The lack of regulation has created an environment similar to the Wild West, where assets are subject to excessive and unpredictable speculation. This situation exposes investors to potential losses of their hard-earned assets.”
Gensler also addressed abuses that have occurred in the emerging cryptocurrency space, in part due to rapid technological developments in financial markets.
He stressed that new means are needed to prevent such abuses and protect investors. However, he also acknowledged that the SEC does not have the authority to regulate the majority of the thousands of tokens in existence, given that most of them are considered investment contracts.
During his testimony, Gensler made a distinction between different types of tokens. He stated : “ most tokens are still considered investment contracts, while Bitcoin stands out for its anti-fraud features”. However, he reminded that crypto regulation was complex, and that the SEC had to act to protect investors.
While the SEC has strong regulatory powers, it must establish adequate guidelines to prevent abuse without stifling innovation in this burgeoning field. The exchange between Gary Gensler and the Senate is still ongoing. We will keep you informed of future developments.
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