Gensler Wants More Funds for the SEC to Protect Crypto Investors Further

The SEC Chief, Gary Gensler, has revealed that the financial regulator would work hand-in-hand with crypto exchanges to register almost all crypto initial coin offerings (ICOs). Gensler made these remarks during the congressional hearing for FTC and SEC's budgets on 18 May 2022.

The SEC Chief noted that most of the coin offerings come under the purview of the SEC's securities policy. Hence, "the SEC would deploy its enforcement tools (according to its regulatory policies) on these tokens."

When a member of Congress asked him why the black minorities are the ones losing the most in the volatile crypto space, Gensler remarked that all communities, not just the black minorities but also the white majorities, are not protected against losses in the crypto space. Gensler also revealed that the SEC would be performing a thorough oversight function over the issuance market since nearly 8,000 digital asset tokens have been created from it.

The SEC Has Legal Power over Nearly All Digital Asset Tokens – Gensler

Gensler added that there isn't any legal power tussle with the commodity futures trading commission (CFTC) in performing oversight functions over crypto tokens. He said, "the CFTC can only have jurisdiction over commodity tokens with [a] smaller market value. In contrast, the SEC has jurisdiction over commodity tokens with [a] large market value, such as BTC. However, the SEC has legal power over top commodity tokens."

The US Commodity Exchange Act clarifies that digital assets such as Bitcoin (BTC) are classified as commodities. Moreover, Gensler reiterated the speculative and highly volatile nature of digital assets and added that "...the public (investors in digital assets) aren't protected."

The Huge Growth of the Crypto Marketplace

In his opening remarks, the SEC Chief stated that there are tens of millions of American investors in the crypto marketplace. Hence, they are exposed to huge risks because of the crypto market's huge volatility and speculative nature.

"There were about 644 crypto tokens globally six years ago. Today, the number has increased by over ten times. The recent downtrend in the crypto market magnifies how crypto investors are exposed to huge risks without any protection," Gensler added.

Hence, an increase in the budget for the SEC would improve the agency's litigation support and enhance the performance of the crypto asset and cyber unit. Additionally, he said it would provide the SEC with more resources to enquire about thousands of complaints and referrals that the public has given the agency.

Unfortunately, Gensler's last statement was hugely criticized by congressman Tom Emmer, representing Minnesota, who implied via his tweet that Gary Gensler only wants more funds for the SEC to do their actual job, having wasted tax-payer funds cracking down on crypto-related activities.

While speaking at the FINRA annual conference on Monday, Gensler stated that investors must thoroughly examine disclosures, token ownership and other important details about cryptocurrency investments before investing in them. However, he added that "the investor has a choice on investing in any risks he desires, but it is only fair that the disclosures should be complete and fair."