SEC chairman Gensler wants brokers between crypto platforms and the public
In a speech to the European Union yesterday by Gary Gensler, chair of the Securities and Exchange Commission, he made it known that lack of investor protections will need to be addressed as regards cryptocurrency platforms.
Gensler started the crypto part of his speech by describing it as being “truly global”, with “no borders or boundaries”, and that it “operates 24 hours a day, and 7 days a week”. He added:
“This innovation has been and could continue to be a catalyst for change in the fields of finance and money.”
However, it was then that Gensler started to get to the meat of his speech, which was that crypto needed to be regulated in order to “guard against illicit activity, and ensure financial stability”.
He went on to explain that most of the market transactions in crypto take place on lending and trading platforms, whether they be centralised, or so-called DeFi platforms that are decentralised.
He pointed out the difference in that traditional exchanges had middle men called brokers, unlike the direct investor/platform relationship in crypto. He stated that this made the public “vulnerable”, and that some areas of crypto had been “rife with fraud, scams and abuse”.
The second part of his speech on crypto centred on stablecoins. He referred briefly to the Facebook-backed Diem project, but then highlighted that there was already an existing stablecoin market that was worth $116 billion.
He elaborated by saying that in July at least three quarters of all transactions on crypto exchanges were between a stablecoin and crypto pair. He warned that this was getting around the traditional banking system and also anti-money laundering regulations etc.
Crypto viewpointIt would surely be argued that crypto is here precisely to avoid the likes of middle men brokers that abound in the traditional financial system. Well-regulated they may be, but they cream off large amounts of the pie, and wield much power over investors seeking to make profitable trades.
Illicit activity and financial stability are absolutely nothing to brag about in the traditional financial system either. The opacity within banking is exactly what crypto is attempting to change.
The SEC can throw its weight around and huff and puff over how awful crypto platforms are, but people are not stupid. They see what the banks do, and they see how the economy is managed.
It would be truly wonderful to see positive regulation of most areas of crypto, because it cannot be denied that some scams and unfair practises are in this industry.
However, if it looks like regulators are going to turn crypto into another playground for the wealthy, where only “accredited investors” are allowed in, and where middle men suck the life out of profits for the ordinary person, then they are going to have a scrap on their hands.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Read more: https://www.cryptodaily.co.uk/2021/09/SEC-Gensler-wants-brokers-between-crypto-platforms-and-public
Text source: Crypto Daily™
