Gary Gensler, the chairman of the Securities and Exchange Commission (SEC) talked about regulating cryptocurrencies and put forward the idea of ‘One Rule Book’. He said that if the industry is really going to move forward, then this regulation can be helpful in building trust.
‘One Rule Book’
On Friday, reports highlighted that the chair of the US SEC believes a ‘One Rule Book’ is appropriate for regulating crypto assets. He wants to ensure there are no gaps or loopholes when it comes to an oversight in the crypto industry, due to which he is interested in making agreements with other regulatory authorities. These include the Commodity Futures and Trading Commission (CFTC).
Therefore, he believes the one rule book would be appropriate. The head of the SEC elaborated that the rule would be designed to provide investors with protection from manipulation, fraud, and front-running and would also help in ensuring full transparency. He added that the rule book would be applicable to all crypto assets, no matter what the pair.
This means it could be security token vs security token, commodity token vs commodity token, or commodity token vs security token.
Working with other regulators
According to the SEC boss, he is collaborating with his peers at the CFTC for developing a ‘memorandum of understanding’. It will be a formal deal, which would be aimed at ensuring that there is transparency and adequate safeguards available when it comes to trading digital assets.
He asserted that if a platform overseen by the securities regulator lists a commodity token, then the SEC would share the information with the CFTC. Gensler stated that this kind of market integrity and rule book would be beneficial for the public. He said that it would help in establishing trust in the crypto market.
Crypto regulation bill
Recently, a crypto regulation bill was put forward by US Senators Cynthia Lummis and Kristen Gillibrand, which comprises of a regulatory framework aimed at increasing the oversight of the CFTC over the crypto industry.
Last week, Gensler had also issued a warning about crypto products that sound ‘too good to be true’. This was likely in response to the crisis that has hit the crypto lending sector, with lending platforms freezing withdrawals without any warning, thereby preventing clients from accessing their assets.
Another warning that the SEC boss recently issued was about crypto exchanges and how they are often trading against their clients. The chairman of the SEC cautioned investors that a lot of tokens circulating in the market are likely to fail, as seen with the implosion of the TerraUSD (UST) stablecoin and the LUNA token.
Gensler has received a lot of criticism regarding his stance on crypto regulation, which has been seen as enforcement-centric. Back in May, Hester Pierce, the Commissioner of the SEC, said that the securities regulator had dropped the ball where crypto regulation is concerned and this would certainly have consequences in the long run, as seen after the crash of the Terra blockchain.