Chairman of the Securities and Exchange Commission Gary Gensler voiced concern on Wednesday that the implosion of cryptocurrency terra (LUNA) and stablecoin terra(UST) will hurt additional crypto investors.
After a hearing before the House Appropriations Committee, he informed reporters:
“I think a lot of these tokens will fail … I fear that in crypto… there’s going to be a lot of people hurt, and that will undermine some of the confidence in markets and trust in markets writ large.”
Last week, the algorithmic stablecoin UST lost its peg to the US dollar, causing its price and that of cryptocurrency LUNA to plummet.
Regulators and lawmakers are extremely concerned about the collapse of the two cryptocurrencies. Last week, US Treasury Secretary Janet Yellen mentioned the collapse of UST in pushing for more stablecoin regulation.
According to Gensler, SEC-registered asset managers have no major exposure to crypto-assets. His agency, however, has limited visibility into private accounts, notably family offices, he said. Most cryptocurrencies, according to the SEC chairman, are securities. He has been pressing bitcoin trading platforms to register with the Securities and Exchange Commission.
He said that they are discussing with these exchanges about a path forward to get the platforms registered and have a pathway for the tokens as well,” he said, adding that the agency has the right to provide exemptions where appropriate. He added:
“They should move towards getting registered or, you know, we’re going to be the cop on the beat, and we’re going to bring the enforcement actions.”
Criticism for Gensler
Some have chastised Gensler for focusing on enforcement when it comes to regulating the cryptocurrency industry. He said earlier this month that the SEC’s crypto enforcement division will nearly double in size.
The chairman of the Securities and Exchange Commission said on Wednesday that his agency lacks the resources to appropriately oversee financial markets. He emphasized, “We’re really outpersonned.”
Representative Tom Emmer of Minnesota tweeted to Gensler about the SEC’s lack of resources:
You used all of the SEC’s taxpayer-funded resources to crack down on cryptocurrency. You don’t have enough money to accomplish your job, so you’re asking Congress for more? You’ve got to be joking, right?, he questioned.