Regulation is imminent? SEC Chairman targets seven major areas in crypto, refuses to discuss Bitcoin ETF: no timeline

SEC Chairman Gary Gensler pointed out in an interview that there are at least seven aspects of regulation planning aimed at the cryptocurrency market currently, and he will use maximum authority in each area as much as possible. He emphasized that comprehensive regulation is beneficial for the development of cryptocurrencies, and regarding the much-anticipated Bitcoin ETF, he did not provide a specific timeline for it.

Since taking office in April this year, the new Chairman Gary Gensler has not yet introduced any specific regulatory measures. Stakeholders can only analyze his views on cryptocurrencies through hearings attended by Gensler, interview clips, and even videos of his previous courses at MIT.

Gensler will participate in the "Aspen Security Forum" to discuss cryptocurrencies on 8/3. Prior to this, Bloomberg conducted an interview with him, which will provide a clearer outline for the next steps in SEC regulation.

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Speculation is a personal choice, but..

Gensler emphasizes:

I remain neutral on blockchain and can even say I am enthusiastic about blockchain technology because I spent three years teaching related courses at MIT. However, this does not mean I am interested in the "unregulated" aspect that many crypto supporters are happy about.

However, Gensler believes that he is not neutral when it comes to "investor protection" because anyone who wants to speculate is making their own choice. However, as a country, the SEC has a responsibility to protect investors from fraud.

Regulation is necessary for mass adoption

Gensler points out that new technologies can promote economic development, and he sees that cryptocurrencies have a similar effect, but strong and comprehensive regulatory measures are needed to achieve this. He gives an example:

Before the government established traffic rules, the automotive industry did not take off. Subsequent speed limits and traffic lights provided public safety and also propelled cars into the mainstream. Only when policies and regulations have clear goals can new technologies be adopted on a large scale.

Therefore, Gensler previously urged Congress to legislate to give the SEC the authority to regulate cryptocurrency exchanges. Although he believes that the SEC's powers are already quite broad, there is currently no regulatory framework for exchanges, leaving the public unprotected in the market.

Bitcoin ETF

Regarding the much-anticipated Bitcoin ETF, Gensler plainly stated that he would not express any opinion on its approval.

Regulating around seven key areas

Gensler continues to urge the SEC to study various areas. Currently, there are at least seven issues that the SEC is closely monitoring, including:

• Custody
• Stablecoins
• Trading platforms
• Lending platforms
• Initial Coin Offerings (ICOs)
• Decentralized Finance (DeFi)
• ETFs beyond Bitcoin

DeFi is nearly all in the crosshairs

He reiterated that regulating exchanges is the quickest way to intervene and has already asked the SEC to use its maximum authority in various areas. However, Gensler mentioned DeFi, where centralized exchanges are no longer the only trading platforms for users:

Now users can engage in peer-to-peer lending through DeFi. Platforms that promote specific rates of return or function similarly to mutual funds with shared pools of funds could fall within the SEC's regulatory purview.

Patrick McCarty, a professor of cryptocurrency at Georgetown Law School, shared his views on Gensler's appointment as SEC chairman.

He believes that Gensler's knowledge of crypto assets signifies that he will give the industry a "fair hearing," but this may still disappoint crypto enthusiasts. He further stated:

When people in the crypto industry talk about wanting regulatory certainty, what they actually want is not what it literally means. In reality, they want to be unregulated, which has never been Gensler's viewpoint.