The Chairman of the US SEC agency confirmed that they are working to bring some necessary rules on the crypto lending companies to ensure the safety of investors.
The US Securities and Exchange Commission (SEC) is a leading regulatory body in the US and this agency is responsible for regulating all spot money markets, including the crypto industry. At present, the agency is working precisely with the collaboration of CFTC agency, a commodity regulatory body in the US, to regulate the crypto industry more perfectly.
On 21 July, Gary Gensler, chairman of the SEC agency, appeared in an interview with CNBC’s Squawk Box. During the interview, Gary said that all the financial institutions were allowed to tie up with other crypto companies to allow the customers to choose crypto investment as an optional choice.
The SEC chairman said that it was also necessary for the financial institutions to reveal the degree of risks associated with cryptocurrency investment.
Sec chairman explained:
“Many of these firms like Blockfi that settle may well be investment companies making hundreds of thousands or millions of customers’ funds, pulling it together and then re-lending it.”
Further, Gary said that such types of activities by the crypto lending platforms are not much regulated because these companies are giving high returns over banks. Gary said that “all these types of companies will be properly registered under the securities laws and protect the public.”
On the question ” whether cryptocurrencies should be included under 401(k) plans”, the SEC chairman indirectly denied to reply and said that he is neutral toward this innovative industry but he is not neutral against the risks associated with crypto Investment.
According to Gary, all crypto Investors whether they are going via any crypto fund or direct investment should remain aware of the risks associated with it because the majority of the tokens are of the Nature of the security asset class & also creative endeavors end in failure, like Terra, BlockFi, Celsius etc.