Finance

Crypto markets need ‘disinfectant,’ says SEC chair

United States Securities and Exchange Commission (SEC) Chair Gary Gensler took aim at crypto industry participants, claiming some avoided registration requirements with the regulator.

In a prepared speech released on March 22 for Columbia Law School, Gensler used his closing remarks to criticize crypto firms’ approach to regulatory oversight. The SEC chair spoke in favor of the benefits of mandatory disclosure for market participants, citing Supreme Court Justice Louis Brandeis, who said, “Sunlight is said to be the best of disinfectants.”

“[T]here still are those who would like to whittle away at the SEC’s disclosure regime,” said the SEC chair. “There are participants in crypto securities markets that seek to avoid these registration requirements. No registration means no mandatory disclosure. Many would agree that the crypto markets could use a little disinfectant.”

Gensler’s remarks came as the SEC is pursuing several enforcement actions against major crypto firms, including Kraken, Binance, Ripple and Coinbase. Many crypto companies and advocacy groups have called on the SEC to establish clear rules of the road in an effort to keep innovation in the United States.

Related: Senators pressure SEC’s Gensler not to approve any more crypto ETFs

The commission has reportedly sent out subpoenas as part of a campaign to eventually classify Ether (ETH) as a security under the SEC’s regulatory purview. In the last two years, the commission has made inroads into approvals of crypto-tied exchange-traded products for U.S. exchanges, including investment vehicles tied to ETH and Bitcoin (BTC) futures and the first spot BTC exchange-traded funds in January.

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