WASHINGTON—Securities and Exchange Commission (SEC) Chairman Gary Gensler is warning that cryptocurrency exchanges that don’t operate with SEC approval can expect to see more enforcement actions.
“These platforms are doing a lot more than just trading,” he said during a recent conference, noting that aside from taking custody of clients' tokens, “they’re also sometimes trading against their customer base. And they’re set up technologically differently than traditional stock exchanges.”
Calling trading platforms one of the two “big challenges” the SEC faces in asserting its regulatory control of the cryptocurrency industry, Gensler warned that any firm working in this field must at least come in and talk to the agency, Pymnts.com reported.
Repeating his claim that the cryptocurrency is the “Wild West” of finance, Gensler said that the SEC’s “main goals are around protecting the investing public, capital formation and the markets, protecting against fraud and manipulation.” He added that with “regard to these digital currencies, if you’re raising money from the public, that still comes under the securities laws.”
Asked if the crypto market was governable, Gensler said, “We have a lot of tools. The challenge here is that many projects are global. They might be located offshore as well.”