SEC Chairman Gary Gensler singles out crypto lenders and says platforms are not complying with regulations
Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), believes crypto lending platforms do not comply with the country’s financial regulations.
Gensler says in a new editorial in the Wall Street Journal that crypto should not be treated differently than the rest of the capital markets just because it uses a different technology.
“We can dispense with the idea that crypto lending is not subject to regulation. On the contrary, the rules have been around for decades. The platforms are not following them. Non-compliance is not the inevitable result of the crypto business model or underlying crypto technology.”
Gensler’s comments come after several high-profile crypto lending firms imploded in recent weeks. In July, struggling crypto brokerage Voyager Digital filed for Chapter 11 bankruptcy after a prominent borrower defaulted on a significant loan.
And about a week later, crypto lender Celsius filed for Chapter 11 bankruptcy after it halted all withdrawals from the platform. In a New York-based bankruptcy court, the company disclosed a deficit of $1.19 billion on the balance sheet between assets and liabilities.
Last month, the SEC chief targeted crypto exchange platforms. Gensler said the stock market and crypto exchanges should offer similar consumer protections. He also raised the possibility of regulating the market-making aspect of crypto exchanges out of existence.
“Crypto trading platforms can also act as market makers. That means when you sell your tokens, one of the platforms can actually buy on the other side. Exchanges don’t do this. They don’t act as their own market makers because that creates inherent conflicts of interest.
Therefore, I have again asked the staff if it would be appropriate to separate the market-making functions of these crypto-platforms.”
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered straight to your inbox
Check price action
Follow us on TwitterFacebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and trades are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured image: Shutterstock/Serg-DAV/Fotomay
