Gary Gensler, the chair of U.S. Securities and Commission (or SEC), has increased his “Wild West” analogy for cryptocurrency, and now calls stablecoins instruments to gamble at old-timey casino.
Gensler stated that most crypto projects dealt with securities which fall within the regulatory purviews of the SEC. The Commodity Futures Trading Commission (or CFTC) was better suited to enforce for other types. Although Gensler described both agencies’ authority as “robust”, he said that there were gaps in their coverage, especially for stablecoins which may have the attributes of investment contracts.
Gensler said that stablecoins almost act like poker chips at the casinos right now. “We have a lot casinos in the Wild West. The poker chip is these steadycoins at the casino gaming table.
Gensler suggested that Congress would be helpful to both the SEC (and CFTC) in regulating and enforcing stablecoins. The SEC chair said that the current laws are not sufficiently broad to handle modern financial instruments like crypto.
“I really fear that enforcement cases will continue to be brought against these individuals, but it’s not impossible. It’s going to be an issue on trading platforms and lending platforms. I believe that many people will be hurt when this happens.
Following the announcement by Coinbase, a major U.S. cryptocurrency exchange, that it would not be pursuing a program for crypto lending, the SEC chair made this statement. The SEC had previously threatened legal action against Coinbase, claiming that the program was a security.
Related: SEC Chair Doubles Down, Tells Crypto Firms to ‘Come in and Talk to Us’
Cointelegraph reported that Gensler wanted to make crypto-related policy changes regarding token offerings, stablecoins and custody. Gensler has always urged crypto projects that they register with the SEC. He specifically stated that they should cooperate with regulators in order to survive long-term.