Gary Gensler explained that a regulatory framework for digital assets by the SEC or CFTC could generate a considerable amount of confidence in investors.
The chairman of the US Securities and Exchange Commission, Gary Gensler, seemed to agree with Congress for providing better regulatory supervision over the crypto space, but also said the commission would act within its reach.
In a virtual hearing by the House Financial Services Committee, North Carolina Rep. Patrick McHenry made some questions to Gensler about what the regulator would add to ensure a better market for digital assets with legal money and a set of law procedures. McHenry also talked about collaborations between regulatory entities regarding digital assets and cryptocurrencies.
Gensler said the cryptocurrency market could receive many benefits from “increased investor protection” within the current authority of the Securities and Exchange Commission, or SEC, over securities and other financial products.
Gensler also made clear his beliefs about the US Congress having the power to address such regulatory oversight rather than the commission imposing its authority with his total leadership.
Gensler and its Opinions about Regulatory Structures
Gensler said that the exchanges that handle these crypto assets do not count on a regulatory structure in either the SEC or the Commodity Futures Trading Commission. That situation could probably generate way more confidence since there is no market regulator around these cryptocurrency exchanges, and therefore there is a lack of protection against fraud.
This hearing is the third that takes place regarding the controversy over GameStop earlier this year. Lawmakers have been digging a bit more into allegations of market manipulation by Robinhood and major hedge funds because of the throttling of short positions in GameStop stocks that happened because of a massive purchase from redditors and other users.
GME’s price’s volatility skyrocketed since it peaked at $ 469.49 on January 28, dipping below $ 50 and fluctuating between $ 100 and $ 300 ever since.
Members of the Senate officially confirmed Gensler’s nomination last month, meaning this was his first hearing on the GameStop controversy as SEC chairman. During his confirmation hearings with the Senate Banking Committee, Gensler had shown his total support to the SEC and its decision to exclude Bitcoin (BTC) from its regulatory scope.
A bit About Gensler’s Story
Members of the Senate confirmed the former chairman of the Commodity Futures Trading Commission (CFTC) to head the Securities and Exchange Commission.
Gensler, a professor at MIT’s Sloan School of Management, joined as a volunteer in November to aid then-president-elect Joe Biden’s team to improve their finance expertise. Biden announced that the former CFTC was about to own the chair of the SEC shortly before his January inauguration.
During his confirmation hearings before the Senate Banking Committee, Gensler presented a very evasive position about whether he would implement changes to the SEC’s policy regarding cryptocurrencies.
Gensler was chairman of the CFTC during President Barack Obama’s period from 2009 to 2014. Gensler has a famous reputation, being known as an inflexible regulator especially as a head of the CFTC. Gensler oversaw a series of reforms of the $ 400 trillion financial derivatives market.
By: Jenson Nuñez
