Gensler addressed the Aspen Security Forum recently and shared his personal views on cryptocurrency. His remarks, he said, were personal and outside of his capacity as chairman of the Securities and Exchange Commission. Gensler noted that prior to taking a position at the SEC, he had researched, written on, and taught the nuances of the intersection between technology and finance at the Massachusetts Institute of Technology. Among some of the topics he covered there were crypto finance and blockchain technology, he said.
Much of his statement centered around the importance of ensuring consumers are adequately protected from the risks associated with trading cryptocurrency, and the role that the SEC will have in providing those protections. “As new technologies come along, we need to be sure we’re achieving our core public policy goals,” Gensler said. “In finance, that’s about protecting investors and consumers, guarding against illicit activity, and ensuring financial stability.”
Among some of the suggestions he offered include seeking congressional action to close gaps and loopholes he says are holding back the cryptocurrency industry. To that end, Congress should seek to prevent transactions and products in the space from “falling between regulatory cracks,” he argued.
“At the heart of finance is trust. And at the heart of trust in markets is investor protection. If this field is going to continue, or reach any of its potential to be a catalyst for change, we better bring it into public policy frameworks,” Gensler said.
"Cryptocurrency is the wild west of our financial system and desperately needs rules of the road to protect investors and our economy. I’m glad SEC Chair @GaryGensler agrees, and I’m going to keep pushing our regulators to act. https://www.bloomberg.com/news/articles/2021-08-03/will-government-regulate-crypto-sec-chair-gary-gensler-on-bitcoin-and-oversight"
As for the SEC, Gensler said the agency is tasked with three key missions, and they are directly relevant to the cryptocurrency landscape. The first task is to protect investors, as mentioned above, but he also said the SEC should actively seek to “facilitate capital formation” and help maintain fair, efficient markets.
“Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West,” said Gensler during his comments. “This asset class is rife with fraud, scams, and abuse in certain applications. There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information.”
Gensler’s comments come in the wake of a recently introduced bill from Rep. Don Beyer, a Democrat from Vermont, that would have a major impact on the crypto industry. According to information from Coindesk, the bill would allow, among other things, the Treasury secretary the power to veto new stablecoins, direct regulators to come up with rules to govern decentralized finance and potentially create a cryptocurrency exchange charter.
The text of the bill can be found here.