SEC Chairman Gary Gensler has said the regulatory authority will examine exchanges more closely in 2022. This comes at a time when regulators around the world are scrutinizing crypto exchanges.
United States Securities and Exchange Commission (SEC) Chairman Gary Gensler said in a virtual press conference on January 19 that cryptocurrency exchanges will face more scrutiny from the agency in 2022. Its purpose is to ensure that investors are protected in the same way. Which they do for other asset classes.
Gensler has long talked about better investor protection for the asset class and has made it a top priority on the SEC’s regulatory agenda. Compliance with securities laws is a key part of this effort, and Gensler commented on this in a speech during November 2021.
The SEC chairman has said that SEC staff are now looking for ways to ensure that exchanges comply with investor protection laws,
“I have told employees to look at every way to bring these platforms inside of investor protection remittances. If trading platforms don’t fall into the regulated space, it will be another year for the public to be vulnerable.”
In the speech, Gensler also talked about a possible change to the rules that would result in the disclosure of hedge funds if they acquired at least 5% of a public company’s stock. These comments are indicative of increased activity in the markets by the SEC.
Ever since the pandemic began, world markets have been engulfed by controversies and retail investor movements, which have proven to have a major impact on the markets. The cryptocurrency shares some characteristics with those trends, and it is not surprising that the regulator wants more enforcement of regulations with it.
Other countries are already looking at exchanges
The regulation story for exchanges is nothing new, with many other countries already well underway with their efforts. South Korea has mandated that exchanges register to obtain a license. The US is far behind in this regard, but Gensler has detailed a possible road to regulation.
In addition to investor protection, the authorities are concerned that the exchange could be a gateway for the funds to be used for illegal purposes. For this, they are keen on the fact that exchanges implement KYC procedures.
But regulation may do the market better in the long run. The head of Australian crypto exchange BTC Markets believes so, although the CEO of Kraken fears that more regulation could be harmful. In any case, it is clear that 2022 will be a landmark year for regulation.
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