Last Updated: March 21, 2022
Gary Gensler, the chair of the US Security and Exchange Commission, expressed his opinion that cryptos need to accede to regulations if they want to survive, The Financial Times informs. He warns cryptocurrency trading platforms that they will be putting their own survival at risk if they do not comply with the laws and regulations.
Gensler told the Financial Times that: “At about $2 trillion of value worldwide, it is at the level and the nature that if it’s going to have any relevance five and 10 years from now, it’s going to be within a public policy framework.”
With the first cryptocurrency appearing in 2009, many had doubts whether cryptocurrencies would even survive the first few months. But now, cryptocurrencies have taken the world by storm and have become very popular these past few years. Bitcoin is considered to be the original cryptocurrency, with many others following in its footsteps.
US lawmakers and regulators are concerned regarding cryptocurrencies becoming popular among many retail investors and big firms over the last year. As the crypto industry has become so profitable, Congress decided to include crypto tax measures in the new infrastructure bill this July. According to the bill’s provisions, cryptocurrencies could soon undergo legitimization. Regarding the possible legitimization, Gensler said that keeping track of cryptocurrencies will offer people protection against fraud. Decentralized finance platforms are frowned upon by regulators because they offer opportunities for investors to deal with each other, not through brokers.
However, in the past few weeks, crypto advocates rallied against the vague language included in the infrastructure bill. They are concerned that many businesses involved in crypto transactions and crypto gambling will move underground because of the controversial wording used in the bill.
Gensler also mentioned his concerns about Chinese businesses using shell companies to mask their operations in the US. He is not sure whether real money flows from these Chinese companies since they do not pay dividends and no one keeps track of their activities. Congress considers moving the deadline for regulations concerning such companies to 2023 instead of 2024 as previously proposed.