SEC chair calls for more oversight of cryptocurrency trading

On Tuesday, the U.S. Securities and Exchange Commission chair called on Congress to give the agency more authority to better police cryptocurrency trading, lending and platforms — a wild west he said is riddled with fraud and investor risk.

Gary Gensler said that the crypto market involves many tokens which are unregistered securities and leaves prices vulnerable to manipulation and millions of investors exposed to risks.

This asset class is rife with fraud, scams and abuse in certain applications. Gensler told a global conference. We need additional Congressional authorities to prevent transactions, products and platforms from falling into regulatory cracks.

Cryptocurrencies reached a record capitalization of $2 trillion in April as more investors replenished their portfolios with digital tokens, but oversight of the market remains patchy.

The industry has been waiting with bated breath to see how Gensler, a traditional appointee who took over the SEC helm in April, will approach oversight of the market, which he has previously said should be brought within democratic financial regulation.

Gensler gave more insight on his thinking on Tuesday, saying he would like Congress to give the SEC authority to oversee cryptocurrency exchanges which are not currently within the remit of the SEC.

He also called on lawmakers to give the SEC more power to oversee cryptocurrency lending and platforms like decentralized finance sites that allow lenders and borrowers to transact in crypto without traditional banks.

If we don't address these issues, then I worry a lot of people will hurt.

Democratic Senator Gensler has been pressing regulators to get a grip on the market, which she described as highly opaque in a July letter to Elizabeth Warren.

Gensler responded by asking Congress to consider giving him more autonomy over the sector.

On Tuesday, he also underscored that stock tokens, a new value token supported by securities or any other virtual product that provides underlying exposure to volatile securities are subject to the securities laws.