The United States Securities and Exchange Commission (SEC) Chair, Gary Gensler, said today that the SEC is investigating cryptocurrency exchange and lending platforms for cryptocurrencies, as well as stablecoins, all of which might represent a risk to investors.
<h2>Cryptocurrencies Are Not Like Laundromat Tokens, Says SEC Chair Gensler</h2>
SEC Chair Gensler <a href="https://multimedia.europarl.europa.eu/en/committee-on-economic-and-monetary-affairs_20210901-1345-COMMITTEE-ECON_vd" target="_blank" rel="nofollow noopener">addressed </a>the European Parliament's economic and monetary affairs committee about transatlantic cooperation in financial services.
“Bringing the platform inside some investor protection border is extremely important,” he added, responding to token proponents' assertions that many tokens were utilities.
“These tokens are not like a laundry token,” Gensler explained, “they are extremely speculative investment tokens for individuals who are attempting to save or speculate for their future, which is why it is reasonable to bring them inside the investor protection perimeter.”
[embed]https://twitter.com/GaryGensler/status/1432781730704920577[/embed]

Gensler also stated that the $116 billion stablecoin business was "embedded" in the larger cryptocurrencies sphere. “I believe that this, in part, assists those who wish to pursue and avoid the host public policy goals,” he added.
<h2>The SEC Is Looking into DeFi</h2>
“Whether it's a trading platform or a loan platform, the majority of market activity takes occur on these platforms, whether centralized or so-called decentralized [ones],” said Gensler.
Decentralized finance (DeFi) platforms provide a unique regulatory issue since investors engage directly with one another, bypassing traditional brokers.

In an <a href="https://www.ft.com/content/fb126d79-2e60-4002-8aba-b08887fca609" target="_blank" rel="nofollow noopener">interview </a>with the Financial Times before his address at the European Parliament, Gensler stated that DeFi was a variant on peer-to-peer lending, which has been present since the beginning of the twenty-first century.

While DeFi platforms are not as centralized as a typical stock market, he claims they have “a good level of centralization” in terms of governance, pricing schemes, and incentives.

The <a href="https://www.cryptoknowmics.com/news/u-s-congressmen-suggests-sec-cftc-to-work-together-on-crypto-regulation/">SEC under Gensler has been focused</a> on the $2 trillion cryptocurrency sector. Cryptocurrency exchanges have come under more scrutiny as their popularity and profitability have grown. 

The UK's Financial Conduct Authority decided last week that <a href="https://www.cryptoknowmics.com/news/binance-declares-as-compliant-by-the-uk-financial-conduct-authority/">Binance</a> witnessed $5 trillion in trade in the previous year and has roughly 13 million clients but no worldwide headquarters, which is “not capable” of being monitored.
According to Gensler, if the business is to "have any significance five and ten years from now," it must be "inside a public policy framework."
“History tells us that it doesn't survive long outside. Ultimately, finance is about trust,” he explained.
Gensler also criticized the absence of businesses who had heeded his advice and registered with the SEC after releasing cryptocurrencies that may qualify as securities. 
Rather than cooperating with the SEC, Gensler claims that some companies are “begging for forgiveness rather than asking for permission.”
Unfortunately, today's laws were drafted in an "earlier bricks and mortar era," as SEC Chair Gensler concedes.

SEC Chair Gensler Says, 'Highly Speculative' Cryptocurrencies Are 'Not Like Laundromat Tokens'

SEC chair Gensler spoke to the Economic and Monetary Affairs Committee of the European Parliament regarding cryptocurrencies are not like laundromat tokens.

Kavya Barua is a voracious learner who is fascinated by crypto and Fintech advancements. Graduated from Janki Devi Memorial College's B.A (Hons) English program at the University of Delhi. She aspires to be a successful professional, having a keen interest in learning and achieving results.

SEC Chair Gensler Says, 'Highly Speculative' Cryptocurrencies Are 'Not Like Laundromat Tokens'

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