SEC Chair: ‘basic disclosures’ by crypto companies will benefit investors
- SEC Chair Gary Gensler says the public need to have ‘full and fair disclosures’ from crypto firms.
- Those offering financial assets should not lie to, or defraud customers, the SEC chair added.
- Non-compliance is an issue and the SEC and other regulators are working to help bring compliance to the market
US Securities and Exchange Commission (SEC) Chair Gary Gensler says the public can benefit more if crypto platforms were able to offer even the most basic of disclosures.
Gensler, who has reiterated severally that the crypto sector needs to do more to protect consumers, made the comments during an interview with Yahoo Finance.
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The public needs “full and fair disclosure”
The SEC chief’s latest commentary on the digital assets industry comes as the market battles an increasingly colder crypto winter, with contagion hitting a number of top platforms.
On Wednesday, crypto lender Celsius Network joined Voyager Digital and Three Arrows Capital on the list of companies to file for bankruptcy. Leverage and ridiculously high yields plagued these companies.
Gensler says the rules that apply to stock brokerages and other traditional companies can also be tailored to fit the crypto space to help protect investors.
“The public benefits by knowing full and fair disclosure and that somebody is not lying to them, you know, basic protections,” he noted.
According to him, this is what should be looked at to help prevent losses such as likely to come from failing companies. And this should apply across the industry, whether the investor is buying crypto or a security like equities.
What’s more beneficial to the consumer would be “those basic disclosures,” he added, noting that people can decide to take risks as they like. However, those offering the financial assets ought to avail all the relevant information.
The person raising the money and selling you those financial assets ought to not defraud you, ought to give you the information so you can make your decisions.”
Gensler also talked of the issue of non-compliance from some platforms and tokens in the crypto space.
He noted that even though the rules that apply to stocks may not work with cryptocurrencies, the SEC and its regulatory counterpart the Commodity Futures Trading Commission (CFTC) can “write rules and use exemptive authority” to allow for disclosures that help the public.
In light of these challenges, the SEC is working towards ensuring compliance with securities rules for crypto lenders, exchanges and broker dealers. This also includes coordination with CFTC, Genser added, reiterating his recent remarks about Bitcoin (BTC) not being a security token.