The U.S. Securities and Exchange Commission (SEC) is looking forward to cooperating with the U.S. Congress and other regulatory bodies on cryptocurrency regulation for crypto investor protection in the States.
Speaking to the U.S. Congress on May 26, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), told Congress that the crypto market needs more regulation for investor protection and asked for greater funding and authority for the same.
“There are many challenges and gaps for investor protection in these markets. Tokens currently on the market that are securities may be offered, sold, and traded in non-compliance with the federal securities laws. Furthermore, none of the exchanges trading crypto tokens has registered yet as an exchange with the SEC. Altogether, this has led to substantially less investor protection than in our traditional securities markets and to correspondingly greater opportunities for fraud and manipulation.” he noted.
Gensler also outlined some of the challenges in regulating the cryptocurrency industry, stating that the regulatory agency is under-resourced in financial terms in comparison to other big firms or industries:
“We only spend about 16% or 17% of our budget, about $325 million a year, on technology, which is less than probably some large firms spend in a month. Some of them even spend that much in two weeks.”
Gensler had previously suggested that the SEC should be cooperating with Congress to address regulation on crypto exchange during a hearing of the House Financial Services Committee in early May.
He believes that currently crypto exchanges are poorly supervised and therefore, he says the SEC would like to work with them to foster investor protection to the platforms, “where these sometimes-commodities, sometimes-securities are trading on the platform.”
He even pointed out that decentralized finance (DeFI) platforms brought further challenges for investors and stated the SEC is trying to protect them.
The U.S. Financial Crimes Enforcement Network (FinCEN) will host a workshop this September on how to counter illegal activity encrypted by privacy tech. Crypto is top of the agenda.
FinCEN wants to address zero-knowledge proofs, also known as zk-SNARKs. zk-SNARKs are a form of cryptography that is foundational to many of the crypto industry’s privacy coins—including ZCash.