Saturday, December 9, 2023

SEC working with exchanges, lending and broker-dealers for investor protection.

The Securities and Exchange Commission (SEC) is working for the public and investor protection with exchanges, lending, and broker-dealers. Gary Gensler, SEC chair, in an interview with Yahoo Finance, said the person raising money and selling the public those financial assets should not defraud. They should provide information to help make decisions.

This year has been turbulent and difficult for crypto firms and companies as the market downtrend has taken many into bankruptcy and forced numerous to lay off staff. Gensler highlighted that rules that apply to traditional brokerages to protect investors in the event of a brokerage failure could also apply to crypto. He said tailoring the disclosure regime for stocks to crypto makes sense. The chair outlined that there’s a difference between asset-backed securities and an equity offering – and there may be differences here as well.

The SEC wants consumer protection or basic protections for consumers whether they are buying a crypto token or security like equities or security. Examples can be drawn from crypto lenders, including Celsius and Voyager who lured investors with double-digit yields for lending out crypto deposits. Voyager customers assumed that their deposits were insured by the FDIC but they realized otherwise when the firm filed for bankruptcy.

In regards to the securities debate, Gensler said the agency has the ability to write rules and use exemptive authority, but the public is not protected because of noncompliance in this space. He disclosed that the SEC has yet to apply or write new rules to protect investors in crypto markets. The chair pointed out that there are rules for what it means to be an investment company, like a mutual fund. The SEC accused BlockFi, in February, of selling unregistered securities, operating as an unregistered investment company, and making material false and misleading statements.

When it comes to taking action, SEC doesn’t hold back.

Cryptured Team
Cryptured Team
The writers team at is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.

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