‘One Rule Book’ Cryptocurrency Regulation Proposed by SEC Chair Gensler

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WASHINGTON, DC - JULY 30: Commodity Futures Trading Commission Chairman Gary Gensler testifies before the Senate Banking, Housing and Urban Affairs Committee in the Dirksen Senate Office Building on Capitol Hill July 30, 2013 in Washington, DC. Gensler and Securities and Exchange Commission Chairman Mary Jo White testified and took questions from Senators during the hearing titled, "Mitigating Systemic Risk in Financial Markets through Wall Street Reforms." (Photo by Chip Somodevilla/Getty Images)

The Financial Times reported on Friday that SEC Chairman Gary Gensler has suggested one rule book for regulating cryptocurrencies. To prevent supervision gaps in the cryptocurrency industry, he is trying to reach agreements with other financial authorities, such as the Commodity Futures Trading Commission (CFTC). However, he told the media that he was referring to the exchange’s one rule book.

The SEC chairman expanded, saying that in addition to ensuring order book openness, the regulation should safeguard investors against fraud, front-running, and manipulation.

According to Gensler, the rules will be followed for all trades in all pairs. The head of the SEC said that he and his CFTC colleagues are working on a memorandum of understanding, which would be a formal agreement to guarantee that trading in digital assets has sufficient protections and transparency. According to him, the SEC would pass that information over to the CFTC if a commodities token is listed on a platform within the jurisdiction of the securities watchdog.

One rule book on an exchange will benefit the public by obtaining that market integrity envelope. If this sector is to go ahead, it must increase consumer confidence in these marketplaces.

Previously, U.S. Senators Kirsten Gillibrand and Cynthia Lummis suggested a plan to increase the CFTC’s control over the cryptocurrency industry.

Gensler warned last week against too good to be true cryptocurrency items. He also warned that cryptocurrency exchanges often trade against their clients. In addition, the SEC chairman warned investors that many tokens would fail in the wake of the failure of the cryptocurrencies Terra (LUNA) and Terrausd (UST), both stablecoins.

For focusing on enforcement while governing digital currencies, Gensler has come under fire. Hester Peirce, a commissioner of the SEC, stated in May that there would be long-term repercussions since the securities watchdog failed to regulate cryptocurrencies adequately.

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