The SEC chairman sympathizes with bitcoin, but he says that there must be stronger regulations to protect users. Gary Gensler hints at the possibility of Bitcoin ETFs receiving approval.
The president of the United States of America Securities and Exchange Commission (SEC), Gary Gensler, spoke openly about his position on bitcoin (BTC), the regulation of cryptocurrencies, and exchange-traded funds or ETFs.
Among other things, Gensler clearly said that solid regulations are vital because there would be more protection for investors who have been storing their cryptocurrencies in digital wallets.
In that sense, Gensler assures that he is intrigued by bitcoin, although he is neutral on the matter. Gensler gave lessons on how to use cryptocurrencies and blockchains at the Massachusetts Institute of Technology (MIT) before taking office at the SEC.
Gensler says that he would not remain neutral about investor protection. His interest in bitcoin does not mean that he is ok with the supervision without intervention that many enthusiasts would like to experience.
The official also took the chance to send a clear message to speculators saying that, If someone wants to speculate, that is their choice, but the SEC has the sole duty as a nation to protect investors against fraud.
An opinion similar to Gensler’s, also coming from the SEC, states about Commissioner Hester Peirce. The official believes that a shy attitude about Bitcoin would harm investors.
Gensler and Bitcoin ETFs
The official also spoke about the long-awaited bitcoin ETFs in the United States of America. Large banks and financial institutions have requested a fund with exposure to the leading cryptocurrency, but they have not received a favorable response from the body.
In this regard, Gensler explained that there is a possibility that they will receive approval, but specifically under the mutual fund rules of the SEC, and that they focus on bitcoin futures, rather than the cryptocurrency itself.
According to Bloomberg, the SEC chairman has pushed for analysis to make several possible policy changes in this area. The agency does not look with friendly eyes at the exchange-traded funds due to alleged risks of market manipulation fraud.
The organization is studying initial coin offerings, trading venues, loan platforms, decentralized finance (DeFi), stablecoins, custodial services, ETFs, and other cryptocurrency funds.
DeFi concern
Gensler showed concern about the new ways that people are using to access cryptocurrencies. One of these ways is through decentralized finance platforms (DeFi).
The chairman said that if companies are advertising a specific interest rate yield on a crypto asset, that could put the loans under SEC supervision.
It is vital to consider that many DeFi platforms are not companies. These platforms are simply a smart contract uploaded to the network, sometimes by anonymous and unregistered developers in any jurisdiction. That would obstruct any regulatory attempt to find completion.
Gensler also spoke to Bloomberg about some other digital asset investment platforms; they could be considered some kind of mutual funds.
By: Jenson Nuñez
