SEC Chair Counters Criticism on Enforcement Approach to Crypto Regulations

Gary Gensler, the chairperson of the US Securities and Exchange Commission (SEC) has responded to widespread criticism surrounding the agency’s ‘hammer’ approach towards ensuring compliance in the crypto space. Gensler was a guest at a podcast hosted by Bloomberg Technology, where he defended for the agency’s action. Part of the criticisms came from the belief that the SEC has yet to adjust its operations to accommodate the changing nature of the digital assets. In defence, Gensler mentioned that it’s preferable to use long-standing regulations in ensuring market integrity and protecting investors. 

There have been growing concerns about the commission’s unbending loyalty to rules that were set even before the internet was created. SEC’s rigid enforcement of these rules has been criticized as an enemy of innovation that makes companies uncertain about the future.

Gary Gensler reiterated that these criticisms hold no water due to the sufficiency of the existing legal framework, which has guided the market for over 90 years. He mentioned that these rules from Congress and other relevant agencies will continue to regulate traditional markets as well as emerging markets, digital assets included. 

Explaining the principles of the SEC, Gary Gensler mentioned that the fundamental concepts of its regulations focus on conflict prevention and transparency. Highlighting the importance of transparency, the SEC chair mentioned that investors have recorded huge losses because of inadequate disclosures from companies and their projects.

The discussions on the podcast shifted to the anniversary of the Bitcoin whitepaper. Gensler took no time to celebrate the milestone the asset has recorded in the crypto space. The SEC chair mentioned that although the technology behind cryptocurrency has evolved, the regulations guiding transparency and investor’s protection have remained relevant. He reiterated that the agency wants to ensure that the guidelines supervising traditional markets also govern digital asset markets to ensure transparency, security and prevent loss of wealth.