Various regulators are showing concern as the crypto market continues its downward slide. They believe it is high time that a move is taken to regulate the sector.
Moreover, agencies like the Securities Exchange Commission (SEC) call for more regulations. The SEC boss, Gary Gensler, earlier stated that crypto regulation is not enough.
While commenting on the market downturn, Gensler streets that the sector needs urgent regulations. He believes that the protection of the rights and funds of investors should be a top priority.
SEC To Protect Crypto Investors Just Like Stock Investors
According to Gensler, the watchdog wants to add a new form of protection. It wants crypto investors to enjoy the kind of protection given to stock investors. It made this in reference to the recent issue faced by Celsius and Binance.
Last week, Celsius had to stop all forms of withdrawals on its platform. Popular crypto exchange, Binance also took similar action. This was after several users tried to sell off their holdings amid the market crash.
Also, Gensler talked about the SEC’s recent regulatory action in the crypto space. Among them is its recent fine on BlockFi, a popular cryptocurrency lending platform. The agency accused the firm of offering unlicensed securities to users in various US states.
As a result, it ordered the crypto lender to pay a fine of over $100 million. $50 million will be paid to the federal regulator. BlockFi paid the other $50 million to 32 regulators in different states.
Furthermore, he added that the agency is currently discussing with six entities, including crypto platforms. The agency is discussing the issue of regulation. According to him,
“There is a possible path that crypto lending platforms can take. Various crypto platforms are considering registering their tokens. At the moment, we are working with six projects to ensure they are properly registered.”
SEC’s Stance On Cryptocurrency
For a while, the SEC has been at the helms of cryptocurrency-related matters. The agency believes that there are no sound regulations governing the crypto space.
According to Finbold, the Chairman of SEC accused crypto firms of insider trading. He noted that several crypto exchanges were betting against customers’ assets.
However, the watchdog is still on its long-lasting lawsuit with Ripple. It accused the blockchain firm of selling unregistered XRP between 2013 and 2020. The tokens were allegedly worth about $1.3 billion.
The regulator’s position towards crypto has caught the attention of several US lawmakers. In March, these lawmakers sent a letter to the SEC. In the letter, they asked the agency while it is always seeking information, especially from crypto startups.
Unfortunately, a recent bill has given more power over cryptocurrencies to the CFTC (Commodity Futures Trading Commission). This is contrary to the SEC’s opinion that most cryptocurrencies are securities.