US SEC Chair Says Cryptocurrency Market Like the Wild West, Indicates Stronger Regulation Ahead

Gensler "Speculative, Possibility of Price Manipulation"

Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC)
[Photo by Reuters]

[Asia Economy Reporter Kim Suhwan] Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), reiterated his strong commitment to strengthening cryptocurrency oversight.

On the 3rd (local time), Chairman Gensler, attending the Aspen Security Forum held that day, said, "Right now, we are not adequately protecting investors in the cryptocurrency market. Honestly, it’s like the Wild West era." He described the current cryptocurrency market as a "lawless frontier" and emphasized, "We need more resources to protect investors."

Chairman Gensler further stated, "Most cryptocurrencies are speculative and there is a high possibility of price manipulation," adding, "Most transactions in the cryptocurrency market occur outside of regulatory oversight."

On this day, Chairman Gensler identified decentralized finance (DeFi) platforms, which operate decentralized trading systems, as one of the targets that the SEC should regulate. This is interpreted as an intention to directly regulate DeFi platforms where virtual asset trading occurs to preemptively block illicit transactions.

Gensler pointed out, "People are buying, selling, and borrowing cryptocurrencies on DeFi platforms and others, but there is a significant gap in investor protection."

According to market research firm CipherTrace, from January to April, investors suffered losses amounting to $83.4 million (approximately 100 billion KRW) due to fraud occurring on DeFi platforms.

Chairman Gensler emphasized that stablecoins (cryptocurrencies designed to be pegged to fiat currencies) should also be considered like traditional securities assets and be subject to SEC regulation. He warned, "Stablecoins have the potential to circumvent traditional financial systems designed to prevent money laundering and tax evasion."

Currently, in the United States, there is no clearly defined agency responsible for regulating the cryptocurrency market. Well known as an expert in the field due to his previous experience teaching cryptocurrency at the Massachusetts Institute of Technology (MIT), Gensler has consistently argued that the SEC should oversee cryptocurrency exchanges.

Earlier, Chairman Gensler emphasized during a recent appearance before the U.S. House of Representatives that a regulatory framework protecting investors should be established for cryptocurrency exchanges, similar to securities laws that regulate traditional assets and derivatives.

This content was produced with the assistance of AI translation services.