SEC Director Gary Gensler said the authority spends too little money on technology, and that the cryptocurrency market needs more control.
May 27, 2021 | AtoZ Markets - The Chair of the US Securities and Exchange Commission, Gary Gensler has borne his testimony today before the United States Congress, highlighting that the SEC protects investors, helps secure the markets against fraud and manipulation, and promotes capital formation.
The US Congress also was mentioned four important areas where he hope to gain insight into the SEC’s recent activities and future resource needs for this themes. The congress clarified that the first is the issue of emerging financial technologies.
"The market for nonfungible tokens, cryptocurrencies, and other digital assets has exploded" . "These have created significant wealth and value, but these markets also feel like a virtual wild west", said Gensler about this issue.
The other area mentioned in which the official was questioned was in innovation in financial products and technology, that is driving new market trends that warrant scrutiny of the Federal Goverment.
About this, Chair Gensler was cuestioned about your recently testified on the issue of Gamestop, and the SEC investigation issues related to the trades of Gamestop on the financial platform Robinhood.
Also, the official announced the plans before the Financial Services and General Government subcommittee of the House of Representatives.
Gensler said that the SEC needs to provide similar protections for crypto exchanges that an investor would get on the New York Stock Exchange or Nasdaq.
“If you placed an order on an app, and you said, 'Alright, I want to buy a stock,' there are rules that protect you that somebody won’t use your order and get ahead of you. [...] So, it’s trying to bring the similar protections to the exchanges where you trade crypto assets as you might expect at the New York Stock Exchange or Nasdaq.”
The new SEC head also outlined some of the challenges to regulating the cryptocurrency industry, stating that the SEC is “under-resourced” in financial terms when compared with some of the big players in the industry.
“We only spend about 16% or 17% of our budget, about $325 million a year, on technology, which is less than probably some large firms spend in a month. Some of them even spend that much in two weeks,” he noted.
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