Gary Gensler Hearing Summary | DeFi Should Have Investor Protection, Exchange Regulation Strengthening; Bitcoin ETF Hearing Commences

The U.S. Securities and Exchange Commission (SEC) held a hearing on the morning of the 27th, Taiwan time. This article summarizes Chairman Gary Gensler's discussion on investor protection in DeFi and exchange regulation. In addition, the SEC has also begun reviewing Bitcoin ETFs from SkyBridge and Fidelity.

Hearing: Many Regulatory Gaps in Exchanges, DeFi Should Have Investor Protection

Chairman Gary Gensler stated that the scale and valuation of cryptocurrencies have significantly increased in the past five years. He said, "As of this Monday, the overall valuation of this market is about $1.6 trillion. Despite growing more than sixfold in just a year, it has dropped by more than a third in the past 12 days." He believes that cryptocurrencies remain a highly volatile and speculative asset class.

Gensler said that five years ago today, the market value of crypto assets was about $9 billion, with the vast majority being Bitcoin and Ether. Until recently, the daily trading volume ranged from $130 billion to $330 billion, but these trading figures are unaudited and not reported to regulatory agencies. "These are just one of many regulatory gaps in the crypto market," he said.

He stated that no cryptocurrency exchanges have registered with the SEC. Additionally, he believes that most cryptocurrencies are securities and, overall, compared to traditional securities markets, they significantly reduce investor protection and increase opportunities for fraud and manipulation. The SEC has prioritized cases involving token fraud or tokens causing significant harm to investors.

Furthermore, he also mentioned that cryptocurrency lending platforms and so-called decentralized finance platforms DeFi have posed many challenges to investors and SEC personnel trying to protect them. The SEC is also seeking input from industry players. He said, "I look forward to collaborating with other regulators and Congress to fill the gaps in investor protection in the crypto market."

SEC: SkyBridge, Fidelity Bitcoin ETFs Under Review

The review of Bitcoin ETF applications has been a series of battles since 2018. It was not until 2020-2021, after Bitcoin gained more social recognition, that more companies joined the challenge to apply. According to the SEC, the recent reviews will begin for SkyBridge and Fidelity Bitcoin ETFs.

In addition, VanEck, Kryptoin, WisdomTree, and Valkyrie are also in the effort.