Monetary assets are a catalyst for change, but government oversight needs to be strengthened, Gary Gensler, chairman of the Securities and Exchange Commission, told the Senate Banking Commission today.
“We do not have sufficient investor protection in cryptocurrency financing, issuance, trading, or lending … This asset class is full of fraud, fraud, and abuse in certain applications. The crypto area is trying to stay outside of investor protection … we can do better, “Gensler told the Banking Commission hearing.
He added that doing better with more money from Congress for more people to regulate crypto assets will be strengthened.
Gensler said he wanted the SEC, the Federal Reserve, the Office of the Comptroller of the Currency, and the Commodity Futures Trading Commission. The Treasury will see which of these areas you can do yourself and in which areas you will need additional authority from Congress.
• Offering and selling crypto tokens
• Cryptographic trading and lending platform
• Stable and valuable coins
• An investment vehicle that provides exposure to crypto assets or crypto derivatives
• Cryptocurrency storage
He said Congress needs to clarify how federal regulators can work with cryptographic issues such as transfer agents and storage.
Talking about crypto during the hearing, Senator Elizabeth Warren (D-MA) said unpredictable high fees could endanger crypto assets for investors and need to be strengthened by regulators. ..
However, Republican Steve Daines of Montana argued that over-regulation could facilitate work abroad.
Patrick Toomy of Pennsylvania, the chief Republican of the Banking Commission, has criticized Gensler for not disclosing whether the SEC will secure or not secure cryptocurrencies.
“We wait for the SEC’s views to be published several years after the product is launched, but only when enforcement measures surge. This regulation by enforcement is very unfavorable and domestic. It will kill innovation, “Toomey accused.
Gensler joins Senator with SEC, Treasury and Federal Reserve Board of Governors to recover in the pandemic-deteriorated Treasury market after a 2014 “flash crash” in the Treasury repo market. He said he was looking at ways to improve competition. There was a serious turmoil in 2019.
He explained that Chinese companies operating in certain industries such as the Internet and technology are prohibited from selling their ownership to foreigners in the United States. As a workaround, we use a structure called a variable interest entity to raise capital on US exchanges through shell companies in the Cayman Islands and other jurisdictions.
On another issue, Gensler said the Commission is working to ensure that the increased risk of companies doing business in China is clearly and prominently disclosed to investors.
Gensler said he hopes the Commission will step up disclosures from private fund managers on conflicts of interest to provide pension funds and other investors with the information they need to make investment decisions. rice field.
During the session, Gensler said the SEC could be a consistent and comparable climate disclosure for investors who are increasingly talking out loud about the issue.
“It helps investors make decisions and companies make money.”
He called reach for yield one of the greatest financial systemic risks facing the country.
Regarding special purpose acquisition companies (SPACs), Gensler said one of the problems was that retail customers were still paying for bankers and promoters.
In raising the importance of the SEC, Gensler said that the US capital market accounts for 38% of the world’s capital markets, almost twice as much as half of the world’s gross domestic product of 24%.
At the same time, he said, in the United States, the debt and capital markets account for 80% of non-financial companies’ financing, and in other countries nearly 80% of their loans come from banks.