ATLANTA, May 15, 2023 – During a question-and-answer session at the 27th Annual Financial Markets Conference hosted by the Federal Reserve Bank of Atlanta, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler addressed the widespread Non-compliant and risky business models in the cryptocurrency market.
Gensler expressed his concerns about the lack of compliance in the cryptocurrency market, calling it a “flawed narrative” based on decentralization.
He emphasized that many crypto businesses operate on a non-compliant basis, often using client funds as part of their business model, creating an inherent conflict of interest.
The SEC is determined to prevent the New York Stock Exchange from operating as a cryptocurrency platform.
Gensler highlighted the interconnectedness between traditional finance and cryptocurrencies, drawing attention to recent events in which three of the four failed U.S. banks held large numbers of cryptocurrency accounts.
This merging of the traditional financial system with the crypto world raises the ever-increasing risk of triggering financial market catastrophe.
The SEC Chairman acknowledged the potential of cryptocurrencies and blockchain technology, recognizing their transformative power.
However, he reiterated the need for regulation to protect investors and maintain market integrity. Gensler emphasized that while decentralization may have benefits, it should not come at the expense of compliance and customer protection.
In response to the challenges posed by the cryptocurrency market, the SEC has been actively working on developing a regulatory framework to ensure responsible development of this fast-growing industry.
Gensler emphasized the importance of collaboration between regulators, market participants and industry stakeholders to create a robust regulatory framework that strikes the right balance between innovation and investor protection.
The SEC’s stance on the cryptocurrency market reflects its commitment to safeguarding the interests of investors and maintaining the stability of the financial system.
Gensler’s remarks call for industry action to address widespread non-compliance and risky business models, and improve transparency and accountability.
As the cryptocurrency market continues to grow and evolve, it faces increasing scrutiny from regulators around the world.