Cryptocurrency firms need to 'come into compliance' with existing rules, SEC's Gensler says

WASHINGTON — Securities and Exchange Commission Chair Gary Gensler pushed backmost Wednesday against disapproval that the bureau failed to enforce rules preventing malfeasance by cryptocurrency firms, specified arsenic the unlawful trading that led to the demise of crypto speech elephantine FTX.

Gensler said the SEC has brought implicit 100 enforcement cases successful the crypto space, straight challenging lawmakers' questions astir the agency's oversight.

In November, Sen. Elizabeth Warren, D-Mass., called connected the SEC to "suit up" successful the aftermath of the FTX failure, arguing the bureau has "fallen behind" the crypto industry. Members of the House Financial Services Committee besides called connected Gensler to reply questions astir what helium knew starring up to the FTX collapse.

"We're already suited up," Gensler told Yahoo Finance.

The SEC main said cryptocurrency firms should beryllium held liable for compliance with existing rules.

"You mightiness deliberation of them arsenic the casinos wherein the investing nationalist is looking for a amended future," Gensler said. "And due to the fact that astir of these tokens are securities, that means that the ... casinos request to travel into compliance with our time-tested laws."

"Their concern exemplary close present is offering the public, they say, an involvement instrumentality successful crypto ... and past perchance trading against their customers, trading up of their customers, lending that out," helium added. "Anywhere other successful finance, these conflicts are not allowed and they're separated out."

Bankman-Fried's steadfast Alameda Research used billions of dollars successful FTX lawsuit assets for trading, a signifier that Gensler said violates a national statute. The institution filed for bankruptcy connected Nov. 11, and Bankman-Fried stepped down arsenic CEO, arsenic the steadfast faced a liquidity crisis.

Bankman-Fried has denied committing fraud.

Lawmakers person observed that national oversight of FTX was hampered due to the fact that the institution is headquartered successful the Bahamas.

Gensler said the SEC has successfully deterred different suspicious crypto steadfast activities. He cited charges against Poloniex and Coinbase for unauthorized operations arsenic examples.

"We brought actions against crypto lending platforms including BlockFi, and we volition proceed to beryllium a vigorous securities regulator, but I truly bash suggest to these intermediaries, these storefronts, these casinos, if you wish, to travel into compliance, enactment with the SEC to get into compliance, disaggregate these businesses," helium said.

Gensler said the SEC would instrumentality much enforcement actions if cryptocurrency exchanges volition not comply, but helium did not elaborate connected what those would be.

"We tin usage immoderate exemptive authorization to tailor things ... but it's not to driblet the basal protections: separating retired these businesses into a abstracted exchange," helium said.