SEC Chairman Gary Gensler has said in an interview with the Washington Post that consumer protection in the cryptocurrency market is like the Wild West.
He has pointed out that there is mostly nothing behind digital assets, which is just a highly speculative asset class. Gensler has drawn parallels to the "free banking era" of 1837 to 1863 and questioned the "survivability" of most cryptocurrencies.
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According to him, the vast majority of these assets are securities, and therefore should be registered with the SEC. Gensler has described both the department he leads and the CFTC as "full" powers, but has pointed out the "gaps" that exist, particularly with respect to stablecoins. Gensler has admitted that such tokens could also have "investment contract attributes." He has said:
"Stablecoins work like poker chips in a Wild West casino. There are a lot of warning signs. We need to be proactive."
Gensler has hinted that both regulators would benefit from "congressional support" for the regulation and enforcement of stablecoins. He has admitted current laws will require clarification in terms of oversight over cryptocurrencies.