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Cryptocurrency trading is a lending institution that promises to repay the depositors’ money by misleading them into believing that they can avoid the rules by the US Securities and Exchange Commission, says the agency’s chief executive.
Gary Gensler told the Financial Times’ future of Asset Management North America Wednesday that those who sell such items should have the same protection against fraud as well as depositors as bank depositors or buyers of insurance or mutual funds.
“This crypto site now has an unplanned growth of banks, insurance[and] security rules [and] looking at the market, I think someone has been hurt, “he said.” A lot of people could be injured. “
Gensler’s intervention comes just days after Coinbase, the cryptocurrency exchange, saved plans providing electronic loan payments, initially promising a 4% yield, after the SEC’s refusal.
Coinbase said the drug, called Lend, should not be considered a safety net under federal law. The SEC did not agree and threatened to sue the company if it established Lend, Coinbase said.
The SEC’s role has been based on a Supreme Court decision, called the “Howey Test”. It agrees that a business agreement complied with a security policy exists if “a person sells his money to a corresponding business and expects to make a profit only from a third party advertiser or a third party”.
In recent months, Gensler has said encouraged cryptocurrency platforms linked to the SEC and discuss whether they should register with the agency. On Wednesday, he said some companies had “spoken openly about their negotiations”.
“There will be times when people come in and say: ‘Register,'” Gensler said. “Not everyone will come and say: ‘Please tell us we are not safe.’
He also said that crypto platforms that receive payments from donors and donors “should carefully consider security regulations and communicate with the registration agency”.
He added: “Most of them should [register] now – or I should have had it even in the past. ”
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Gensler spoke at the FT meeting after chairing his first SEC meeting as chair. At the meeting, the council voted to increase the requirements for disclosure of proxy votes to trustees plus the amount they sell or exchange.
The SEC said the changes, including the disclosure of voters’ votes and reporting in a machine-readable manner, would help streamline financial analysis. If, in the end, it is possible to change the broadcasting system, which was developed almost two decades ago.
The SEC has also approved a request that financial regulators unveil their votes on the so-called “say on pay”, a concept that is part of the Dodd-Frank Act.
The SEC’s directive will be open to the public for 60 days after it is released in the Federal Register.