WASHINGTON–Gary Gensler, chairman of the Securities & Exchange Commission, has asked staff at the agency to look into four new areas for potential new cryptocurrency regulation.
The announcement follows a March directive from the White House to develop more recommendations for governing the new industry.
"There’s no reason to treat the crypto market differently just because different technology is used,” said Gensler in remarks given before the Penn Law Capital Markets Association annual conference. “We should be technology-neutral.”
The four issues Gensler wants the SEC to explore include:
- Protection for retail traders in crypto, similar to the way they are protected in equities. As an example, the New York Stock Exchange is regulated in ways that a Coinbase or a Kraken are not, which provides retail traders there more protections, reported Axios in its review of the proposal.
- Teaming up with the Commodities Futures Trading Commission. Because crypto and securities trade side-by-side on crypto platforms in the form of tokens, though, the two regulators need to explore ways to work together, Axios stated.
- Firewall custody of assets. “Crypto's platforms take custody of assets (actual cryptocurrency), while regulated equity exchanges do not,” reported Axios. “Crypto often gets stolen from such exchanges, putting investors at risk. Gensler wants to explore rules around separating exchange and custody functions.”
- Separate market making out. “Regulated exchanges serve as a meeting place for buyers and sellers, but some crypto exchanges also do buying and selling in order to keep liquidity flowing,” said Axios. “Gensler asked staff to look at whether separating these functions would be appropriate in crypto as well.