The Securities and Exchange Commission of the United States (SEC) advised investors that Bitcoin on cryptocurrency xchanges lack security.
Only Congress will protect crypto-investors SEC President Gary Gensler stressed that trading of the leading cryptocurrency represents a void in supervision at the hearing of the House of Financial Services Committee.
While the audience was originally on GameStop short squeeze, Patrick McHenry asked what the regulatory body was going to do to ensure “limited money and the rule of law” in the cryptocurrency industry.
Despite the SEC’s authority to regulate digital assets that the agency considers securities, Bitcoin does not fall within that jurisdiction. Gensler said:
There’s a lot of authority that the SEC currently has in the securities space, and there are a number of cryptocurrencies that fall within that jurisdiction. But there are some areas, particularly Bitcoin trading on large exchanges, that the public is not currently really protected.
The SEC stresses that Bitcoin is an asset according to the law of the United States and is not subject to the supervision of the SEC. Gensler said at the hearing it might benefit from increased security for investors on the $2 trillion crypto market.
The SEC chair added that Congress could consider bringing investor protection to crypto trading platforms.
It’s only Congress that can really address it. It would be good to consider whether to bring greater investor protection to the crypto exchanges.
As the SEC and the Commodity Futures Trading Commission (CFTC) are unable to provide for a regulatory mechanism for the digital trade in assets, Gensler indicated that Congress should “develop trust.” He argues that there is no defense from fraud or ma without strong market regulatory control on crypto exchanges.
Last month, Senate representatives voted for Gensler’s appointment and his first appearance as SEC Chair was the GameStop hearing. Because he has a more wide-range digital exposure and experience than his predecessors, Gensler has been monitoring his term in the agency closely.
In March, Rep. McHenry launched a new bill, the Elimination of Barriers to Innovation Act, to tackle unsolved questions about how regulations impact the market for crypto-money. The proposal was adopted by the U.S. House of Representatives and awaits further support by the Senate and the President.
