SEC’s Gensler Calls for Watchdogs to Collaborate on Crypto Oversight
(Bloomberg) -- Securities and Exchange Commission Chair Gary Gensler said his agency and the top U.S. derivatives regulator should work together to rein in cryptocurrency exchanges.
Gensler has asked SEC staff to collaborate with the Commodity Futures Trading Commission to develop a new plan to oversee platforms trading tokens that are a mix of securities and commodities, according to remarks at an event hosted by the University of Pennsylvania Carey Law School. More rules are needed for exchanges because retail investors are currently vulnerable to scams and market manipulation, he said.
“I've asked staff to consider how best to register and regulate platforms where the trading of securities and non-securities is intertwined,” Gensler said on Monday.
Read more: CFTC Seeks Bigger Role in U.S. Efforts to Oversee Crypto Trading
While the SEC has jurisdiction over securities, the CFTC regulates the U.S. derivatives market -- which has prompted a debate about which agency should take the lead in policing crypto. Exchanges such as FTX Trading Ltd. are pushing for the CFTC to take on an expanded role, while lawmakers on Capitol Hill as well as Gensler and CFTC Chairman Rostin Behnam have been jockeying for control.
Gensler said the SEC is also looking into whether platforms that take custody of customers' assets are protecting them adequately, and if that function should be segregated from normal trading operations. The SEC chief has repeatedly said most tokens are securities and should be subject to his agency's rules.
“The fact is, most crypto tokens involve a group of entrepreneurs raising money from the public in anticipation of profits -- the hallmark of an investment contract or a security under our jurisdiction,” Gensler said.
©2022 Bloomberg L.P.
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