Cryptocurrency exchanges can expect stricter scrutiny from the Securities and Exchange Commission (SEC), according to chair Gary Gensler, per Bloomberg.
"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 SEC chair reportedly said during a virtual conference yesterday.
His comments come amid yet another crypto-related hack. Earlier today, crypto exchange Crypto.com confirmed the exchange lost almost $34 million to hackers.
However, this is far from the first time Gensler has raised consumer protection alarm bells when it comes to crypto.
Last summer, the SEC chair emphasized the need for consumer protection laws being applied to crypto during an interview with CNBC.
"We're an investment protection agency and right now this asset class, Bitcoin and the hundreds of other coins that investors are trading at, is a speculative asset class. What we want to do is provide some of the basic protections against fraud and manipulation," Gensler said at the time.
His calls for consumer protection have also gained political support, especially from Senator Elizabeth Warren (D-MA), who has called for "rules of the road" for this industry and once lamented that crypto puts the financial system in the hands of "shadowy super-coders."
Gary Gensler and crypto regulation
When it comes to crypto, protecting consumers is one of Gensler's highest priorities, but he's also chimed in on other issues facing the industry.
Speaking at the Aspen Security Forum last year, Gensler said that thousands of decentralized finance (DeFi) "tokens" are potentially operating as unregistered securities.
"Decentralized finance platforms not only can implicate the securities laws—some platforms also can implicate the commodities laws and the banking laws," he said.
He has also said that cryptocurrencies do not satisfy the functional requirements of money, and they facilitate criminal activity.