Earlier this year, when the US SEC got its new chair, Gary Gensler, the crypto industry was excited because it thought it got a supporter ‘on the inside.’ However, as time moves on, this sentiment was brought more and more into question.
Gensler has called the cryptocurrency industry a Wild West multiple times while trying to explain his views on digital coins. Continuing with the analogy, he also named stablecoins instruments for gambling at old-time casinos.
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Gensler touched upon a number of aspects of the crypto industry, including saying that most projects in the crypto space are securities. As such, they fall under the SEC’s jurisdiction. As for the others, they are best handled by CFTC. However, he also added that the authority of both agencies is robust, but even so, there are some projects that don’t fall under either of the two agencies’ coverage.
Among them are stablecoins, which may or may not have certain attributes similar to investment contracts. While this remains debatable, Gensler continued to talk about the stablecoins, noting that they remind him of the casino poker chips.
A new batch of problems to derive from stablecoins
He further added that the CFTC and SEC alike could benefit from Congress’ help regarding the enforcement and regulation of stablecoins. But, the current laws are broad when it comes to handling cryptocurrencies, as some of the newest financial instruments.
He says that he expects a lot of problems to emerge when it comes to bringing these enforcement cases. The problems will concern trading and lending platforms, and he believes that a lot of people will be hurt by them.
The SEC’s new views have impacted the crypto industry heavily, as only recently, they resulted in Coinbase abandoning its crypto lending program. The SEC was directly responsible for this, as it warned the exchange that it will suffer consequences in the form of a lawsuit if it decides to launch the program.
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