US SEC chair says more investor protection needed on crypto exchanges

US Securities and Exchange Commission Chair Gary Gensler said on Thursday he would like to see more regulation around cryptocurrency exchanges, including those that solely trade bitcoin and do not currently have to register with his agency.

”This is a quite volatile, one might say highly volatile, asset class, and the investing public would benefit from more investor protection on the crypto exchanges,” he said at the Financial Industry Regulatory Authority’s annual conference.

His comments came one day after a brutal sell-off in bitcoin on concerns over tighter regulation in China and unease over the extent of leveraged positions among investors.

Gensler said he has asked Congress to consider the issue.

Crypto tokens that are issued in the same way as classic investment tokens do fall under the SEC’s jurisdiction, and the regulator has taken around six dozen enforcement actions against those which are not registered with the agency, Gensler added.

”And there are hundreds of tokens out there, so we’ll continue through examination and enforcement doing what we can in that space,” he said.

The SEC also needs to refresh its rules around cryptocurrency marketing and how it is being used in the 2020s, including through game-like features on mobile applications offered by retail brokerages, robo-advisors and wealth management firms, Gensler said.

”We all know that there’s greater access and some real enhancement that can come from these mobile applications, but at the same time, we have to freshen up and ensure that our rule sets address it properly around the communications with the public,” he said.