SEC Chairman Gary Gensler told the Wall Street Journal CFO Network Summit that new legislation to regulate crypto markets could inadvertently undermine broader market regulations that already exist. They fear that other big markets may seek to migrate to a less compliant environment, which could be a bad situation for the economy generally.
Undermining the Protections in Other Trillion Dollar Capital Markets
The Chairman of the U.S. Securities and Exchange Commission, Gary Gensler, spoke concerning the state of regulation in the crypto market and how, from the perspective of the regulatory body, the creation of entirely new legislation for the crypto market may cause firms in other trillion-dollar markets to seek to act in a non-compliant environment.
He said that from the point of view of the government SEC, their priority is to protect people from the basic bargains with cryptocurrency companies that claim to be offering returns on their investments. He mentioned that if any company claims to be raising money from the public and, based on their entrepreneurial effort, the public anticipates a return within a certain period of time, the company is to be regarded as an investment company. Such institutions should consider giving basic disclosures and not mislead them. He gave examples of companies offering yield farming and staking opportunities with millions of users, like BlockFi. In the body’s opinion, the crypto market should fall under the same regulations as all other capital markets.
“Turning away from legislation, we don’t want to undermine the protections that we have in other trillion-dollar capital markets. We don’t want our current public companies or mutual funds to inadvertently say that they want to be non-compliant as well.” Gary Gensler told The Wall Street Journal.
Gensler made it clear that the regulatory compliance that has been put in place in other capital markets for years has been helpful to the stability and economic growth of the United States, and so, leaving the crypto market out of the existing regulations to form another bill could be an issue for other markets in the short term and the general economy in the long term.
The Cynthia Lummis Crypto Bill
Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) introduced a bipartisan crypto bill on Tuesday, hoping to extend a comprehensive set of rules across digital assets in the United States, giving industry lobbyists something to fight.
Their bill would exempt small-scale purchases of goods and services from taxation by exempting transactions of less than $200, perhaps paving the way for a cryptocurrency that functions more like a currency. The law would also give the Commodity Futures Trading Commission more authority and a dominating presence, as expected.
