Gary Gensler said that brokers in the crypto market perform several functions regulated by the SEC. These include exchanges, broker-dealers, clearing agents and custodians. According to Gensler, they should register accordingly.
Moreover, Gensler spoke to the audience of lawyers in Washington that if someone falls into one of these buckets, they will enter, discuss and register, and the priority of crypto tokens that qualify as securities is considered by applicable law.
In his opinion, the combination of different features of a cryptocurrency broker creates internal conflicts of interest and risks for investors.
Gensler says crypto lenders fall under SEC powers. His words describe other players in the crypto market that are under their jurisdiction under the SEC.
Frightened Users
The comments should scare cryptocurrency market participants who want to bypass the costly requirements typically associated with SEC registration. Which include risk exposure, risk management controls, and capital and liquidity minimums. However, we will have to check whether these companies are willing to comply.
Furthermore, Gensler said he has asked SEC officials to work with cryptocurrency intermediaries. They will verify that they have registered each feature. Therefore, it can separate them into separate legal goods to reduce conflicts of interest.
He believes the SEC may need to adjust existing disclosure requirements, saying tailored product information exists elsewhere under the SEC’s purview.
