SEC Chair Gensler Outlines Plans for Crypto Trading, Exchanges, Investor Protection, Bitcoin ETFs

By August 4, 2021DeFi
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SEC Chair Gensler Outlines Plans for Crypto Trading, Exchanges, Investor Protection, Bitcoin ETFs

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has outlined how the SEC plans to regulate the crypto industry. Focusing on investor protection, Gensler discussed concerns the SEC has about crypto trading, exchanges, lending, defi platforms, and exchange-traded funds (ETFs).

Gary Gensler Outlines SEC’s Crypto Priorities

SEC Chairman Gary Gensler outlined the agency’s plans regarding the regulation of cryptocurrencies at the Aspen Security Forum Tuesday. He described:

Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West. This asset class is rife with fraud, scams, and abuse in certain applications … If we don’t address these issues, I worry a lot of people will be hurt.

He elaborated: “There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information.”

Regulating Crypto Platforms: Gensler Says Many Are Offering Unregistered Securities

The SEC chairman proceeded to explain that many tokens are offered and sold as securities. “I’ve urged staff to continue to protect investors in the case of unregistered sales of securities,” he said.

Next, the chairman said he believes that crypto trading platforms, lending platforms, and decentralized finance (defi) platforms “can implicate the securities laws,” and in some cases the commodities laws and the banking laws as well.

He also stressed that cryptocurrency trading platforms do not have the same investor protection as traditional exchanges, like the New York Stock Exchange (NYSE). In addition, he said that many overseas platforms allow U.S. investors to trade cryptocurrencies using virtual private networks (VPNs), thus bypassing regulations.

Gensler emphasized:

Make no mistake: To the extent that there are securities on these trading platforms, under our laws they have to register with the Commission unless they meet an exemption … If a lending platform is offering securities, it also falls into SEC jurisdiction.

Regulating Investment Vehicles With Crypto Exposure, Bitcoin ETFs

The chairman also addressed investment vehicles that provide exposure to crypto assets, including mutual funds that invest in bitcoin futures on the Chicago Mercantile Exchange (CME).

“I anticipate that there will be filings with regard to exchange-traded funds (ETFs) under the Investment Company Act (’40 Act). When combined with the other federal securities laws, the ’40 Act provides significant investor protections,” Gensler opined, adding:

Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded bitcoin futures.

Gensler also addressed the custody of crypto assets, stating: “Custody protections are key to preventing theft of investor assets, and we will be looking to maximize regulatory protections in this area.”

SEC Needs More Resources to Protect Investors

Gensler stressed that the SEC has taken and will continue to take its “authorities as far as they go.”

He also claimed, “The test to determine whether a crypto asset is a security is clear.” Nonetheless, he admitted that “There are some gaps” in regulating the crypto space, elaborating:

We need additional Congressional authorities to prevent transactions, products, and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector.

The former MIT blockchain professor proceeded to emphasize that the SEC is ready to work closely with Congress, the administration, and other regulators worldwide to oversee the crypto space. He opined:

In my view, the legislative priority should center on crypto trading, lending, and defi platforms. Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending.

What do you think about Gensler’s comments on regulating the crypto industry? Let us know in the comments section below.

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Ethereum Community Gears up for the Long-Awaited London Fork Set to Go Live on August 5

The Ethereum community has been gearing up for the highly anticipated London Network Upgrade which should take place on August 5 around 2:00 p.m. (EDT). Node operators have been asked to upgrade their nodes as soon as possible, as the upgrade is scheduled to take place at block height 12,965,000.

Ethereum Set to Fork on Thursday, Blockchain Will See 5 Improvements

According to the countdown clock hosted on etherscan.io, the Ethereum (ETH) blockchain will be upgraded in the near future, on or around Thursday afternoon. Previously, Bitcoin.com News reported on the London upgrade on July 9, 2021, and at the time it was estimated block 12,965,000 would fall on or around August 4.

According to Ethernodes data, as of 16:20 Beijing time, 65.6% of the nodes are ready for the Ethereum London hard fork, and the remaining 34.3% will be upgraded within 2-3 days. pic.twitter.com/BXIl67LIeh

— Wu Blockchain (@WuBlockchain) August 3, 2021

The “London Mainnet Announcement” was revealed by Tim Beiko when the developer wrote a summary about the upgrade via the official Ethereum blog.

Man, I’m so ready for Ethereum 2.0.

I was literally talking about it since before Eth even launched.

I don’t believe most people truly understand how game-changing Serenity will be— Dapps like @AugurProject will be 100x more efficient and usable.

So excited.

— Jeremy Gardner (@Disruptepreneur) August 4, 2021

With the countdown clock ticking down, the Ethereum fork should take place on Thursday on or around 2:00 p.m. (EDT), depending on how long it takes to process more than 5,000 ETH blocks. The London hard fork includes a total of five Ethereum Improvement Proposals (EIPs). The EIPs included in tomorrow upgrade include:

Ethereum Markets See a Streak of Daily Gains

Prior to the upgrade, ETH has managed to jump over 8% in value on August 4, and weekly statistics show ETH is up over 15% on Wednesday. 30-day statistics show ethereum (ETH) has gained 21% but the crypto asset is only up 10% during the trailing 90 days. Ethereum prices have managed to gather well over a week of daily gains prior to the fork.

Probability that Ethereum's London upgrade (including EIP 1559) goes off flawlessly?

— John W. �������� (@_JohnWhelan) August 2, 2021

When the community discusses the London hard fork, usually it is said that the most significant changes added to the blockchain will include EIP-1559 and EIP-3554. EIP-1559 will change Ethereum’s fee rate to a new scheme that makes the crypto asset ether deflationary. While EIP-3554 adjusts the Ethereum miner difficulty bomb to ease the transition from proof-of-work (PoW) to proof-of-stake (PoS).

On Thursday there will be an Ethereum London Upgrade community call and an Ethstaker live watch call as well.

What do you think about the upcoming Ethereum London Upgrade? Let us know what you think about this subject in the comments section below.

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