The Securities and Exchange Commission said Tuesday that it hopes to regulate certain cryptocurrencies and crypto markets, but needs help from Congress first.
SEC Chairman Gary Gensler would 'take our authorities as far as they go' to ensure investor protection, but said that 'gaps' exist when defining the SEC's role in regulating Emerging Technologies.
'We need additional Congressional authorities to prevent transactions, products and platforms from falling into regulatory cracks, Gensler said in remarks at the Aspen Security Forum on Tuesday. He also asked for'more resources" to help the SEC keep up crypto initiatives.
Capitol Hill appears primed to at least pay attention to the call to action by the SEC. Last week, Virginia Democrat Don Beyer introduced legislation that would define which digital assets fall under the purview of the SEC and which one falls under the purview of the Commodity Futures Trading Commission.
The lawmakers are also spending time this week working through text in the infrastructure bill regarding the treatment of crypto brokers for tax reporting purposes.
Isaac Boltansky, a director of policy research at Compass Point, cautioned that Congress is unlikely to move immediately to set up the regulatory framework for regulation oversight.
'At the moment there is insufficient consensus regarding these issues on Capitol Hill and the odds are against comprehensive digital asset legislation, Boltansky told Yahoo Finance in an email.
The Gensler speech added that the Gensler speech was a reminder that no holistic regulatory entity will be able to respond with a singular regulatory regime.
Forthcoming reports from the U.S. Treasury and a Federal Reserve-led working group to crypto related matters may lay out the roadmap for an interagency approach.
Despite all those, Gensler's remarks offer the deepest look at how he would like the SEC to enforce and monitor in crypto space.
The SEC chairman warned crypto watchers to not make a mistake in recognizing the agency's jurisdiction over tokens sold as securities, trading platforms that allow the exchange of securities, and custody services.
Gensler expressed concern that many tokens and exchanges are currently unregistered, examples of gaps he would like to work with Congress and other regulators in closing
'Frankly, at this time it is more like the Wild West, Gensler said, pointing to crypto scams and fraud that could present security concerns in some cases.
Gensler said that he was not opposed to cryptocurrencies or the technology that underpin them. Gensler, who researched blockchain at the Massachusetts Institute of Technology prior to his SEC role, said he would like to install protection railings on the emerging asset class to protect investors.
'If somebody wants to invest, as they have in gold or silver, it can be a speculative game. But Layer over this investor protection, Gensler said. I think this enhances economic activity.