SEC chairman Gary Gensler recently said that crypto exchanges and/or trading platforms must be treated the same as a regular stock exchange. This, in the light of the current market conditions and lack of stringent regulations. Recent events prompted the SEC chair to issue a renewed call for regulation and uniformity.
Regulatory compliance by crypto companies will help them not only grow but also protect customers. Gensler said that crypto platforms can and must protect uses against fraud and manipulation. This can be done if they register with the SEC and accept regulation. There are many customers who are using these platforms and have lost money during the financial downturn. SEC staff have the authority now to pursue unregistered companies and persuade them to do the right this. The goal is to ensure regulation when and where it is appropriate.
Gensler also said that crypto exchanges are playing the role of market makers and there is potential conflict of interest. The SEC is acting as a watchdog and trying to ascertain how to segregate marketing functionality from the platforms. If a traditional trading exchange doesn’t do this, why is a crypto exchange getting that privilege?
Gensler made these statements just a few days after saying that crypto companies should be more transparent as a part of the protection process. This, while the SEC is investigating Coinbase for its securities tokens listings. Coinbase apparently refutes the claims made by the SEC along with other big players in the industry. Coinbase believes that the SEC is trying to enforce regulations.