SEC Chair: Regulate Crypto Platforms Like Exchanges
Platforms for cryptocurrency trading and lending should be registered and regulated like traditional securities exchanges, argues U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler.On April 4, 2022, he announced that SEC staff is working on this during his keynote address to a conference on digital assets, cryptocurrency, and blockchain held by the University of Pennsylvania Carey School of Law.
Gensler observed that many tokens trading on these platforms meet the definition of "securities." He also remarked that these crypto platforms play roles similar to traditional regulated exchanges. Thus, he believes that investors should be protected in the same way.
Gensler said: «The SEC's remit is overseeing the capital markets and our three-part mission: protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets… regulators also care about guarding against illicit activity… There's no reason to treat the crypto market differently just because different technology is used. We should be technology-neutral.»
Gensler stated that the crypto market is worth about $2 trillion, with daily trading volume of more than $100 billion. He also stated that, among crypto-only exchanges, the top five platforms account for 99% of all trading, and just two platforms make up 80%. In crypto-to-fiat transactions, 80% of trading is on five platforms. Regarding trading on decentralized finance (DeFi) platforms, the top five account for almost 80% of total trading.
Gensler noted that a typical trading platform has dozens of tokens on it, and many have more than 100 tokens. Moreover, he believes that many of these tokens may meet the definition of «securities.» Specifically, he stated that
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