Gary Gensler Says Crypto Is Slipping Through Gaps, Proposes Crypto Exchange Regulation

Crypto exchanges might soon be required to comply with a new regulatory framework from the SEC.

What Happened: Gary Gensler, the newly-appointed chairman of the U.S Securities and Exchange Commission (SEC), believes that the best point of putting in place investor protections is as at cryptocurrency trading venues.

“I think that there’s gaps in our current system…there are many crypto tokens that do come under the securities laws, and our agencies are trying to enforce the laws but there’s thousands of tokens and we’ve only been able to bring seventy-five actions,(sic)” said Gensler said during a Wednesday hearing.

Gensler noted that while there are several other crypto tokens in the marketplace that are “non-compliant” with securities laws, he views the bigger issue as crypto exchanges.

"I would think if we could work with Congress to try to bring investor protection where these - sometimes commodities, sometimes securities - are trading on the platforms," he said.

The SEC Chairman’s primary concern was that without “rules on the road,” market participants would be able to front-run orders for a particular crypto asset made through a trading platform.

See also: New SEC Chairman Gary Gensler Confirms A Lot Of Cryptocurrencies 'Are Indeed Securities,' Paving The Way For New Legislation

Gensler said the aim would be to bring similar protection to crypto exchanges that one would expect at the New York Stock Exchange or the Nasdaq.