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Electric vehicle drivers should also wear seat belts! Why does the SEC chairman rely on early securities laws and refuse to enact new laws?

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Electric vehicle drivers should also wear seat belts! Why does the SEC chairman rely on early securities laws and refuse to enact new laws?

For cryptocurrency businesses in the United States, the opaque and outdated regulatory framework has long been a point of contention with the SEC. Today, U.S. SEC Chairman Gary Gensler released a carefully crafted video explaining why he insists on relying on the 1933 Securities Act and the 1934 Securities Exchange Act to set rules, and clarifying practices in crypto platforms that harm customer interests.

Enhancing Security of Cryptocurrency Platforms

At the beginning of the video, Gary discusses the differences between cryptocurrency platforms and traditional exchanges. He points out that in the securities market of the 1920s, there were rampant manipulations and fraud, but over several generations, the U.S. capital market has become a model due to its proactive measures against malicious activities and front-running, which has instilled confidence in people.

"Although they are not perfect, they have been validated over time," Gary says.

However, in today's cryptocurrency trading and lending platforms, millions to tens of millions of retail investors trade without a broker as an intermediary on a daily basis, making it essential to ensure that users on these platforms receive the same level of protection. Therefore, Gary emphasizes the importance for these platforms to register with the SEC and undergo regulation to ensure that these crypto tokens are registered as "securities."

Furthermore, Gary mentions that transferring stocks to a securities exchange is safe, and cryptocurrency platforms must also achieve this level of security.

The Cryptocurrency Market Is Not Exceptional

"There is no reason to treat the cryptocurrency market differently just because they utilize different technologies," Gary states.

According to Gary, thinking otherwise is akin to claiming that electric cars do not need seat belts because they do not require gas. In other words, the same level of protection must be sought in the cryptocurrency market.

"We should not risk undermining 90 years of securities law just because we are talking about investor protection; we should maintain technological neutrality," Gary concludes.