Crypto retail investors should be protected

Gary Gensler, chairman of the United States Securities and Exchange Commission, said the agency’s protections, which apply to investors in traditional assets, should extend to those in the crypto market.

In prepared comments released Monday for the Penn Law Capital Markets Association annual conference, Gensler said he has asked SEC officials to review the registration of crypto platforms so they are subject to the same regulatory framework as exchanges. Additionally, the SEC chairman said the agency’s staff could work towards bringing regulatory clarity to the crypto space by examining how to register platforms “where securities and non-securities trading is intertwined.” and whether crypto retail investors should be afforded the same protections as in traditional markets.

“Crypto may offer new ways for entrepreneurs to raise capital and investors new ways to trade, but we still need investor and market protection,” Gensler said. “We already have robust methods in place to protect investors trading on platforms. And we have solid ways to protect investors when entrepreneurs want to raise money from the public. We should apply the same safeguards to crypto markets.”

The SEC chairman added that his staff would consider whether it would be “appropriate to separate custody,” seemingly separating the registration system for platforms that offer custody and those that don’t.

“There is no reason to treat the crypto market differently just because a different technology is being used.”

Related: Crypto in the crosshairs: US regulators are eyeing the cryptocurrency sector

During his tenure at the SEC, Gensler has repeatedly pushed for registering crypto projects with securities to ensure investors are protected in a “come in and talk to us” approach. Many crypto firms have criticized the lack of regulatory clarity in the United States, which can be interpreted by agencies such as the SEC, the Commodity Futures Trading Commission, and the Financial Crimes Enforcement Network.