Gary Gensler, the chairman of the United States Securities and Exchange Commission (SEC), has once again called out for cryptocurrency regulations after warning investors to be aware of crypto assets that promise a high return on investments.
Gensler Seeks Formal Crypto Regulation With CFTC
In a Financial Times report on Friday, the SEC chair said he is seeking formal cooperation in collaboration with the Commodity Futures Trading Commission (CFTC) and other financial agencies to set up a rulebook to regulate the asset class properly.
Gensler noted that the regulatory framework would prevent crypto operators from exploiting loopholes in fragmented crypto regulatory structures in the U.S. to carry out malicious activities.
Additionally, the SEC chair said he was working on a Memorandum of Understanding (MoU) with the CFTC towards establishing proper regulations to bridge the cracks in the existing rules and protect consumer interest. Gensler previously worked in the CFTC jurisdiction and headed the Commission between 2009 and 2013.
“I’m talking about one rule book on the exchange that protects all trading regardless of the pair — [be it] a security token versus security token, security token versus commodity token, commodity token versus commodity token” to protect investors against fraud, front-running, manipulation as well as providing transparency over order books,” said Gensler.
He also stated that one book will help organize the crypto industry and build better trust among investors if the market has any hope of moving forward.
SEC to Transfer Assets Ruled as Commodity
Gensler’s proposal to establish a single regulatory framework to control cryptocurrency usage comes a few weeks after U.S. senators Cynthia Lummis and Kirsten Gillibrand introduced the first bipartisan crypto law.
The bill classified most digital currencies as commodities, contrary to the SEC’s notion of the asset class as securities. It also placed the CFTC in charge of regulating cryptocurrencies instead of the SEC, which has been trying to bring the assets under its jurisdiction.
The SEC controls digital assets recognized as securities, while the CFTC oversees those deemed commodities.
Gensler stated that if a token recognized as a commodity is listed on a platform controlled by the SEC, the agency will pass the information across to CFTC to take necessary actions.