Some crypto projects and protocols, for some time now, were having issues with the SEC. This includes several ETF applications that the SEC rejected. More recently, the Securities and Exchange Commission filed a Wells Notice against Coinbase with respect to its lending program.
Due to this unclear nature of regulations, some stakeholders in the crypto industry were vague concerning what SEC demands from them. Hence the reason Brian Armstrong of Coinbase sought for a “dialogue.”
With respect to this, the Chairman of the Securities and Exchange Commission—Gary Gensler—talked about the relationship of the commission with the cryptoverse. He addressed this in his “testimony” to the United States Senate Committee on Banking, Housing, and Urban Affairs.
Foremost, Gensler noted that most players in the crypto industry are not working within the confines of the law. According to him, “this asset class is rife with fraud, scams, and abuse in certain applications.”
He went ahead to explain the SEC’s plan to ensure investor protection. Concerning this, he said the commission is working along with other regulators like CFTC, Department of Treasury, Federal Reserve, and Office of the Comptroller.
Asides from that, Gensler wrote in testimony that the place of dialogue cannot be downplayed in policy-making. Thus, he is inviting every necessary stakeholder to meet with the SEC for discussions. “I’ve suggested that platforms and projects come in and talk to us,” he says.
Finally, he cautioned that the emerging crypto market should be cordial with regulations to ensure not only the safety of everyone, but the longevity of the industry itself.
Quoting him: “I think that this technology has been and can continue to be a catalyst for change, but technologies don’t last long if they stay outside of the regulatory framework.”