Crypto Industry waits as lawmakers set to grill SEC Chair
Lawmakers in the US are set to grill SEC Chair Gary Gensler over the slow pace of reforms and regulation surrounding the crypto industry as many parts of the industry continue to exist beyond the realms of their legislation.
This opens up the possibility that there might be scams that cheat funds off gullible investors and even in such cases, the SEC would not have the regulations and laws ready to take on such scamsters. The questioning is expected to cover bitcoin, stablecoin, crypto tokens, and other crypto-related projects and products including lending products, one of which done by Coinbase were recently blocked by the SEC. The SEC feels that it needs the support of lawmakers to expand its powers and jurisdiction so that it would be able to cover all aspects of the crypto ecosystem and would be able to regulate them from end to end.
“We just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” Gensler said in prepared remarks. “Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications.”
So far, the lawmakers seem to be divided into the two sides of the fence with one set of lawmakers wanting the SEC to go ahead and sanction various crypto-related companies and projects. They also want to know why the SEC is still reluctant in approving various crypto assets especially when they are proved to be as good an investment option when compared to other instruments as well. On the other hand, few other lawmakers and the SEC believe that they would need more legislation so that they can establish more control over the crypto industry before they approve various crypto-related assets and companies to ensure that the multi-trillion-dollar industry does not spiral out of control and jeopardize the financial ecosystem.
Over the last few months, the SEC has been holding back on approving many crypto-related funds as it had decided to err on the side of caution and this seems to have irked many lawmakers. The crypto industry would be closely watching this tussle between the lawmakers and the SEC Chair to glean clues on the direction of thinking of the SEC and how the crypto industry would grow within the US in the future.