SEC Chair Gary Gensler Will Regulate Crypto Trading Platforms

avatar

garygensler.png

Yesterday, US Securities and Exchange Commission published a video Gary Gensler explaining what crypto trading platforms are from SEC's point of view and what they are planning to do. The video is only three minutes long and are part of Office Hours with Gary Gensler youtube series. Feel free to visit the following link to watch the video yourself.

We already knew SEC has started a prob into Coinbase and assessing whether Coinbase listed coins that may be considered securities. Coinbase will probably fight with counter legal actions. The rumors of SEC going after crypto exchanges were circulating for a years now, and we knew at some point they would have to intervene. It seems like the video is intended to inform the public of their intentions and not make it look like they are against crypto investors. As any government agency would say, the purpose of them wanting to regulate crypto platforms is to protect the investors.

I personally have not made any conclusion wether regulating crypto platforms is a good thing or not. Because regulators do not have a great reputation of actually protecting the investors. Even them trying to do something now, seems like a reaction to the recent events with crypto lending platforms that stopped withdrawals of funds and people are not sure if they will ever get their funds back. I think regulators could be a little more trustworthy if they took proactive actions. But that too could be viewed as if government is taking actions against crypto, and not scams and fraudulent actions. It is easier to step in and justify actions after fraud took place and people lost funds.

It is also true that there is a lot of fraud and scams in the crypto space. How should one make sense between these two extremes? One extreme is regulators making it more difficult for people to invest/trade. Another extreme is when scammers take advantage of people's trust, steal their money, and get away with zero consequence just because there are no rules in place.

The way Gary Gensler is making his case for regulating crypto trading platforms kinda makes sense. These centralized platforms do operate like centralized stock exchanges. And these same crypto platforms do engage in activities that may go against the interests of their customers and can be viewed as conflict of interest. Geneler even points out "not your keys not your coins" concept, and how crypto trading platform users lose their control over their assets when they deposit their assets in one of these platforms.

He also makes it sound like SEC will work with these platforms together to achieve its goals and protecting investors. It all sounds good, when they explain in simple terms like this. But big question is, if it is so simple to work with SEC, register securities and operate under regulations, why don't these crypto trading platforms do so? That would actually help their reputation and they would be able to conduct their business with no worries of legal consequences. I think the problem is, in reality, working with regulators is not that easy as Gensler is hinting. It costs a lot of money, legal fees, bureaucratic headache and takes long time.

Wether we like it or not, these centralized crypto trading platforms will need to be regulated one way or the other. If not SEC, then some other agency. Simply, because scammers will continue scamming. The problems of Celsius and Voyager wouldn't be the last one. Other platforms will emerge that will take crazy risks with their customers assets. When things go up they will make money, when things go down, they stop withdrawals, go bankrupt and disappear.

So, yes it is a good idea to get rid of scammers and fraudulent behavior from the crypto space. But this would come with costs for retail investors. Some platforms will just shut down business and continue their business elsewhere. It already happens. For example, Binance stopped serving US customers because they didn't want to deal with US regulators. Even when they make ".us" platform for US customers, it didn't have the same amount of options as the global website would offer. US investors need to use VPN or other work arounds to participate in crypto investments and to use certain platforms. Some platforms, monitor and don't allow connecting with VPN too.

Keeping coins in self custody wallets and not exchanges is a good reminder. But to get these coins, one would need to get on the exchanges first. If regulators keep scaring these platforms away from operating their business in the US, how are US investors suppose to buy these coins.

So, the question is to regulate crypto trading platforms, or not to regulate?. I am not convinced one way or the other and don't have a strong opinion yet. At the same time I am not happy with the status quo either. What I would like to see is free and fair marketplace. Perhaps, decentralized solutions are the ultimate answer.

I do like Gary Genser. He has very deep knowledge about blockchain technologies, decentralized systems, and bitcoin. I have seen his lecture on this topic and it was very educational. He also recently admitted that bitcoin is the only asset he would not classify as a security. It seems, at this stage SEC's focus is only on crypto trading platforms and not the crypto projects. What do you think? Let me know in the comments

Posted Using LeoFinance Beta



0
0
0.000
24 comments
avatar

Hope they do what they say and not the opposite.anything crypto is to be treated with optimus care, if he think that regulating the system (crypto exchange plaforms) will reduce the rate of scam in the space then he is welcome.

0
0
0.000
avatar

Lol oooh the shitcoin casinos are going to have to pay some serious fines, that means they need to sell bitcoin to cover those fines and operations meaning cheap sats for me :)

0
0
0.000
avatar

It is easier to step in and justify actions after fraud took place and people lost funds.

This would actually be a great way to get the crypto world behind the regulations. Come in and save the day a few times, and many people will support the idea when it eventually happens.

This post has been manually curated by the VYB curation project

0
0
0.000
avatar

This post has been manually curated by @finguru from Indiaunited community. Join us on our Discord Server.

Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.

Please contribute to the community by upvoting this comment and posts made by @indiaunited.

0
0
0.000
avatar

Hey. I found a tool online that makes it really easy to write your blog posts. It basically makes it as easy as copy-paste work without running the risk of getting flagged because of copy-paste. I use it every day and you can try it for free. https://jasper.ai?fpr=riaan65

0
0
0.000
avatar

Great Post!

!1UP

You can earn passive income by delegation of tribe tokens to "The Cartel"!


Click the banner to join "The Cartel" Discord server to know more!

0
0
0.000
avatar
(Edited)

PIZZA! PIZZA!

PIZZA Holders sent $PIZZA tips in this post's comments:
curation-cartel tipped geekgirl (x1)
@torran(6/10) tipped @geekgirl (x1)

Join us in Discord!

0
0
0.000
avatar

Bro just needs to get over himself and realize his job is pointless

0
0
0.000
avatar

!PIZZA
!PGM

0
0
0.000
avatar

Sent 0.1 PGM - 0.1 LVL- 1 STARBITS - 0.05 DEC - 15 SBT tokens to @torran, @geekgirl

remaining commands 4

BUY AND STAKE THE PGM TO SEND A LOT OF TOKENS!

The tokens that the command sends are: 0.1 PGM-0.1 LVL-2.5 BUDS-0.01 MOTA-0.05 DEC-15 SBT-1 STARBITS-[0.00000001 BTC (SWAP.BTC) only if you have 2500 PGM in stake or more ]

5000 PGM IN STAKE = 2x rewards!

image.png
Discord image.png

Support the curation account @ pgm-curator with a delegation 10 HP - 50 HP - 100 HP - 500 HP - 1000 HP

Get potential votes from @ pgm-curator by paying in PGM, here is a guide

I'm a bot, if you want a hand ask @ zottone444


0
0
0.000
avatar

Well, if SEC will properly follow a good step in protecting the public fund as they claim to be it may be a welcome development but all government bodies may be the same because they may still be on the opposite side.

0
0
0.000
avatar

There’s no reason to treat the crypto market differently just because a different technology is used. That would be like saying drivers of electric cars don’t need seat belts because they don’t use gas.

0
0
0.000
avatar

😁 THE MORE U KNOW

that won't fly.

protect your ASSets!!

👍👍👍

0
0
0.000
avatar

Dirty Garry Gensler in action again, I don't believe a single word he's telling.

0
0
0.000
avatar

It's just an excuse to add in more regulation and I don't think anyone found it unexpected. They want control over the system and they can do so because of the fiat offramps.

Posted Using LeoFinance Beta

0
0
0.000
avatar

It reminds me of Binance story last month. If Chainalysis is accurate that just 0.15% of all crypto transactions in 2021 were involved in illicit activity, I wonder why the regulators seem to ignore the 99.85% legit transactions and focus on that tiny % as if that's the whole thing about crypto.

As for registration and regulation as a way to protect investors from manipulation and fraud, I have a few questions in mind. Can regulation really prevent manipulation and fraud? How come regulation cannot prevent the involvement of 2% to 5% of fiat worth $800B to $2T in money laundering? How come no regulation has been made successful so far in the Eurodollar market after more than 6 decades of its existence?

Posted Using LeoFinance Beta

0
0
0.000
avatar

Regulation only ever means a gatekeeping system for the big guys to keep out challenging innovations from new upstarts. Regulation is about maintaining the status quo, not protecting the public or customers.

Did regulation of the financial markets and banks save us from the catastrophe of the 2008 world financial crisis?

Did regulation punish those responsible for the 2008 crisis?

Did regulation change the behaviour of the financial industry since then and prevent the current unfolding financial crisis?

The answer to these to questions is the same answer to the question, "Should crypto and it's service providers (exchanges ect.) should be regulated."

NO

0
0
0.000
avatar

Wow. He pointed out 'not your keys, not your coins'? I'm feeling positive about government. I don't feel like myself.

0
0
0.000