US Securities and Exchange Commission chair Gary Gensler has made it clear that his agency does not need any additional authority to bring crypto companies to heel, though he would appreciate it if Congress would give the SEC a bigger budget and expand its reach beyond the country’s shores.
Gensler addressed several issues regarding the cryptocurrency sector during an interview with Yahoo Finance yesterday, December 7th, stating that the SEC already has disclosure and governance policies in place to hold companies dealing with digital assets accountable in the event of any issues about the asset class and their dealings with customers and investors alike.
However, the SEC head did not comment about the recent crash of crypto exchange FTX and the cases its fallen CEO, Sam Bankman-Fried, currently faces. Likewise, he did not answer questions as to whether or not the agency would come up and implement crypto-specific regulations next year.
Gensler also announced that he recently expanded the SEC’s crypto-enforcement team to deal with issues related to the industry.
Lessons to Learn from a Crisis
According to Gensler, both traditional financial institutions and digital assets firms learned a hard lesson from the spectacular collapse of FTX and its founder’s fall from grace.
He candidly stated that the cryptocurrency sector would not survive if it did not comply with the norms set under public policy. At the same time, he reminded firms that they should not delve into everything all at once, citing how many crypto trading platforms declared that they wanted to continue running commingled platforms doing everything from lending, trading, money exchange, and even custody functions.
In the wake of the FTX crisis, the SEC has yet to call out other platforms. This is despite common knowledge that the case seeks to determine whether Ripple’s digital asset XRP could rightly be considered a security and, therefore, subject to the SEC’s authority.
Gensler, however, announced that blockchain-based file sharing and payment platform LBRY violated laws governing securities by selling its LBC crypto. The ruling against LBRY is considered a milestone in the SEC’s ongoing legal campaign.
But industry watchers noted that the SEC has yet to go after crypto exchange Coinbase for listing what appear to be securities without registering itself as a national securities exchange. Despite this, the agency released a list of several tokens, including Flexa AMP, RLY, and KROM, that are considered unregistered securities but were, nevertheless, traded on the platform.