By Alicia Maher
Over the years, the crypto market has developed, as new cryptos and exchanges are popping up everyday. However, the governing bodies of certain nations are putting measures to ensure they regulate the emerging digital asset and firms that will provide crypto services to users. Also, the laws are to protect the rights of investors.
Gensler Accuse Crypto Firms Of Betting Against Customers
According to a report published by Bloomberg, the US Securities Exchange Commission chairman, Gary Gensler, has issued a warning to the general public concerning the possibility that some crypto exchange firms are going behind clients to trade against them.
The chairman noted that all firms trading crypto are within the regulator’s jurisdiction and, as a result, need to go through proper registration. This is because trading crypto falls under the purview of the agency. In addition, he said that most of these organizations were breaking the regulations set by the agency by putting their own interests above that of investors.
The agency chairman singled out Stablecoins such as Tether, USD Coin, and Binance USD for criticism because they are affiliated with cryptocurrency exchanges. This affiliation gives stablecoins the ability to avoid Know Your Customer and Anti-money Laundering practices. Criminals are capitalizing on this to defraud innocent investors.
SEC And The Crypto Industry
The SEC, well-known for taking a strict stance on cryptocurrencies in general, is now involved with cases against famous companies in the cryptocurrency and technology industries, such as Nvidia and Ripple.
Also, the regulatory body has been engaged in a legal struggle with Ripple since 2020. This was after the agency accused Ripple of unethically selling over $1.3 billion of unlicensed XRP coins from 2013 to 2020. The battle is still in court, with both parties refusing to give up.
Recently, the watchdog has resolved charges against microchips firm NVIDIA Corporation for failing to disclose its earnings, which cryptocurrency mining was part of. The company was fined $5 million. The agency has advised other firms to ensure that they regularly update the agency on activities.
In March, some lawmakers from the United States sent a letter to the SEC, expressing their worry about the regulator’s information-seeking procedure, which they said was inhibiting innovation, particularly in regard to cryptocurrency firms.
During the same period, Finbold made a report on the view of Jan van Eck, CEO of the investment management company, VanEck. Mr. van Eck believed that SEC refused to release spot BTC ETF because they had not approved the financial product.