Crypto Exchanges Will Face More Scrutiny, Says SEC Chair

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SEC Chair Gary Gensler has said that the regulatory authority will examine exchanges more closely in 2022. This comes at a time when regulators all over the world are scrutinizing crypto exchanges.

United States Securities and Exchange Commission (SEC) Chair Gary Gensler, in a virtual press conference on Jan. 19, said that cryptocurrency exchanges will face more scrutiny from the agency in 2022. The aim is to ensure that investors receive protection in the same manner that they do for other asset classes.

Gensler has long spoken about better investor protection for the asset class and has made it a top priority in the SEC’s regulatory agenda. Compliance with securities laws is a major part of this effort, and Gensler made remarks to the same in a speech during Nov. 2021.

The SEC Chair has said that the SEC staff are now looking at ways to ensure that exchanges ensure follow investor protection laws,

“I’ve asked staff to look at every way to get these platforms inside the investor protection remit. If the trading platforms don’t come into the regulated space, it’d be another year of the public being vulnerable.”

The speech also saw Gensler talk about a possible change in rules which would result in hedge funds disclosing if they acquired at least 5% of a public company’s stock. These remarks are indicative of increased activity by the SEC in the markets.

Since the pandemic began, the world’s markets have been roiled by controversies and retail investor movements that have proven to have a sizable impact on markets. Cryptocurrencies share some characteristics with those trends, and it is unsurprising that the regulator wants more enforcement of rules to accompany it.

Other countries already looking at exchanges

The story of regulation for exchanges is not a new one, with many other countries already well underway with their attempts. South Korea has mandated that exchanges undergo registration to receive a license. The U.S. is quite behind in this regard, but Gensler has detailed a potential road to regulation.

Besides investor protection, authorities are concerned that exchanges could be a gateway towards using funds for illicit purposes. To that end, they have been keen on the fact that exchanges implement KYC processes.

But regulation may do the market more good in the long run. The head of Australian crypto exchange BTC Markets believes so, though Kraken’s CEO fears that over regulation could be harmful. In any case, it’s clear that 2022 will be a landmark year for regulation.

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The post Crypto Exchanges Will Face More Scrutiny, Says SEC Chair appeared first on BeInCrypto.


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