SEC chair highlights US cryptocurrency regulation shortfalls

The Securities and Exchange Commission (SEC) chair has outlined gaps in US regulation of cryptocurrencies that could cause investor risk and financial crime concerns.

Speaking at a security forum, SEC chair Gary Gensler said that the current gaps that exist within the US regulation of cryptocurrencies raise anti-money laundering (AML) concerns and put investors at risk.

According to Mondaq, Gensler outlined a number of concerns that arose from the lack of cryptocurrency investor protections.

These concerns include that many crypto tokens are currently improperly unregistered securities that lack mandatory disclosures and market oversight. This, Gensler professed, put the crypto prices at risk for manipulation and leave investors vulnerable.

In addition, Gensler highlighted that crypto trading platforms are regularly likely to offer trading, improperly, in tokens that are securities.

His final concern centered on the idea that the use of cryptocurrencies can commonly facilitate bad actors’ efforts to sidestep various public policy goals related to traditional banking and financial systems, including AML, sanctions and tax compliance.

Gensler also mentioned that the SEC will be looking to ‘maximise’ protections in the crypto asset custody space and highlighted the SEC’s open comment period on the topic.

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