Gary Gensler, ever since his hiring as Chair of the SEC, has been waging war against cryptocurrencies. He currently went all out against, in his words, crypto trading’s ‘Wild West’. He promised that misconduct and fraud in crypto activities would be attacked with vigor. While this has a lot of crypto players in the US worried, it’s very likely that the changes rolled out by the SEC chairman will be gradual and not sudden.
Gensler suggested that his desire is to enforce digital asset regulation in the same way that commodity-related trading instruments, bonds, and stocks are regulated. He also stated to the Aspen Security Forum that he has multiple priorities. One of them involves keeping an eye on newer developments such as decentralized finance (Defi) and stable coins. He suggested that it’s important to monitor these developments as they have been drawing more and more mainstream investors in recent times.
The talk of crypto market regulation isn’t new. For years, governments and crypto skeptics have been critical of crypto’s decentralized nature. While decentralization has some benefits such as instant transfers and transactions, it also has numerous negatives. One of the greatest criticisms of the crypto industry is that it can promote rampant illegal activities such as terrorism and drug trafficking. It can also make tracing criminals difficult, as transactions are decentralized and can’t be traced.
Gensler has a long mission ahead of him, as the crypto industry in the US hasn’t been historically too compliant with SEC rules and directives. However, there seems to be very little option apart from enforcement, as the SEC’s front door has been bypassed too many times by crypto players.