At the Columbia Law School conference on Friday, Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), reiterated the importance of transparency in the crypto markets. He stated that this sector could benefit from some “disinfectant” to improve its integrity.
Gensler emphasized the significance of disclosures in financial markets, particularly related to climate and cyber risks. He believes that these disclosures contribute to more efficient markets and protect the interests of investors.
During his speech, Gensler pointed out that some participants in the crypto securities markets try to evade registration requirements, resulting in a lack of mandatory disclosure. He suggested that implementing more transparency could address this issue and enhance the integrity of the crypto markets.
The SEC has consistently emphasized that crypto firms must adhere to the same regulatory standards as traditional financial institutions. Over the past year, the commission has taken action against platforms like Coinbase and Kraken for allegedly operating without proper registration.
The SEC’s focus on disclosures also extends to other areas, with Gensler highlighting the importance of disclosures related to executive compensation, climate risks, and cyber risks. Recently, the SEC voted to adopt rules requiring companies to disclose climate-related risks.
During a question and answer session, Gensler emphasized the role of both the SEC and the Commodity Futures Trading Commission (CFTC) in regulating crypto. He acknowledged that the agencies have different perspectives on whether certain cryptocurrencies, such as ether, should be classified as securities or commodities.
Although there may be conflicting views on the classification of ether, Gensler and CFTC Chair Behnam maintain regular communication to ensure effective regulation. Behnam has stated that ether is a commodity, while the SEC’s stance on the matter remains less clear.
Behnam has also raised concerns that conflicting classifications could create compliance challenges for market participants. If the SEC were to classify ether as a security, it would potentially conflict with CFTC regulations, thereby affecting registrants who list ether as a futures contract.
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[Disclaimer: This article does not constitute financial or investment advice. Please do your own research before making any investment decisions.]
