Securities and Exchange Commission Chairman Gary Gensler said Tuesday that the recent crash in prices for popular cryptocurrencies has underscored the need to better regulate the digital-asset industry and bring greater investor protection to the space.
“The urgency is highlighted” by recent market action, Gensler said in an interview at the Wall Street Journal’s virtual CFO Network summit. “The urgency has been there and it’s an urgency about investor protection.”
The price of bitcoin
has fallen more than 30% so far in June, while the price of ether
is down 38%, according to FactSet.
Gensler pointed to a recent SEC action taken against the crypto lending platform BlockFi as evidence of the regulator’s aggressive oversight of the industry. In February, the company agreed to pay $100 million to settle charges that it was offering an unregistered security when it offered variable interest payments in return for crypto deposits from customers.
The regulator added that the agency is in talks with roughly six platforms, including crypto exchanges, to register with it.
“There’s a potential path forward on the crypto lending platforms,” Gensler said. “The crypto trading platforms, are sort of looking at that and saying what do we do until those tokens themselves are registered? We have about six projects that we are working through trying to get crypto markets to get them registered.”
Over the weekend, BlockFi competitor Celsius Networks LLC said that it was pausing all withdrawals, swaps and transfers between accounts “due to extreme market conditions,” and on Monday the world’s largest crypto exchange, Binance temporarily paused redemptions of bitcoin do to technical difficulties.
Gensler appeared to reference these incidents in his remarks, arguing that crypto platforms need to register with the agency to help ensure their customers are protected from similar incidents in the future.
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