Cryptocurrency has quickly gained momentum and prominence around the world, as users seek better ways to store, use, and transact digital assets. As with any new development, regulations have had to be put into place to help ensure user protections, market integrity, and legal transparency. Within the cryptocurrency industry, some deem the Securities and Exchange Commission (SEC) in the US to have the final say on the regulation of global markets.

Most recently the spotlight has been put on SEC Chair Gary Gensler, who has spearheaded new cryptocurrency regulations in a number of different areas. Gensler understands the promise of blockchain technology, but also has a primary focus on investor safety, and promoting regulations that can help protect investors and further the market.

One of his first actions was to accurately define how digital assets can be treated like securities. This addressed the past “Howey test”, a ruling from the US Supreme Court case on financial product investments, to better understand what types of digital assets fall within the scope of a security. To start, Gensler requested self-regulatory organizations, such as the Financial Industry Regulatory Authority (FINRA), to take the lead on approving broker-dealer and exchange applications that involve digital assets.

Gensler has repeatedly pushed for more stringent regulations of digital assets during his time, particularly regarding token-related transactions and Initial Coin Offerings. Much of his stance on regulations is focused on meeting oversight requirements, while also providing clarity to the controversial cryptocurrency space. To start with, he has requested a new risk monitoring program that would help protect cryptocurrency users from fraud and criminal activity.

The intense focus on cryptocurrency, and more specifically Gary Gensler’s role as the head of the SEC, show a strong commitment to regulating the cryptocurrency market. This could lead to a more open and transparent investment space for all participants, ultimately leading to better market liquidity and stability. Moreover, it aims to decrease the number of ill-intended actors, and ensure that everyone abides by the same set of rules and regulations.

As the cryptocurrency space is still in its infancy, it’s likely that regulations will continue to evolve over time, with Gensler and the SEC at the forefront. Investors can look to Gensler as a beacon of knowledge and transparency in the digital asset space and trust that the SEC is focused on protecting the consumers, and strengthening the digital asset space for the long-term.



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