Gary Gensler dragged all crypto exchanges under the authority of the SEC agency and claimed that almost every crypto exchange is violating securities law.
Gary Gensler is chairman of the United States Securities and Exchange Commission (SEC) since Feb 2021. At that time he was elected by the Biden administration. Since then, Gensler has been regulating the crypto sector under traditional securities law.
On 18 April 2023, Gensler appeared before the House Financial Services Committee and there he said that almost all the crypto companies provide multiple financial services under a single roof e.g exchange functions, broker-dealer functions, custodial and clearing functions, lending functions, etc.
Gensler noted that traditional financial services providers provide every different kind of service under different roofs citing the safety of the investors.
Gensler further added:
“The commingling of the various functions within crypto intermediaries creates inherent conflicts of interest and risks for investors—risks and conflicts the Commission does not allow in any other marketplace.”
According to Gensler, the majority of the crypto companies are non-compliance and such mixed financial services may decrease the public trust level of citizens in the capital markets.
Furthermore, the SEC chairman said that it is the law, and here every crypto platform needed to register, no matter whether they are decentralized or centralized crypto service providers.
On the recent enforcement actions against several crypto companies, Gensler said that the regulatory body has taken action against several crypto companies & also talked about the violation of laws with market participants in enforcement actions.
Gensler also pointed out that the agency is also considering bringing an update in the current investment adviser custody rule to target crypto companies to ensure whether they are eligible to provide crypto custody rules or not.
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