Gensler Delivers Remarks on Crypto Markets

SEC Chairman Gary Gensler delivered remarks on cryptocurrency markets at the University of Pennsylvania’s annual Capital Markets Association Conference highlighting the SEC’s work in three areas crypto platforms, stablecoins, and crypto tokens. Gensler called for crypto platforms to be registered and regulated much like exchanges. Gensler also noted that while there are current exemptions for alternative trading systems (ATSs), they are quite different than crypto asset platforms as they are used by retail investors not only by institutional investors. He also noted the SEC would be examining custody rules and market making functions of platforms. Regarding stablecoins, Gensler highlighted areas of concern including the use of coins in illicit activity, right of redemption issues, and financial stability concerns around what “backs” stablecoins and the interconnectedness of the crypto ecosystem. Gensler stated that as entrepreneurs raise money from the public by selling crypto tokens “it is important that we work to get crypto tokens that are securities to be registered with the SEC.” He noted that while tokens offer a new path of capital raising, “we still need investor and market protection.”