Crypto lending companies should be governed by the Securities and Exchange Commission (SEC), according to SEC Chair, Gary Gensler.
According to Gensler in a recent interview with CNBC, the way that lending companies for digital assets currently operate places them under the SEC’s purview.
Gensler said these digital assets companies could be investment firms that hold hundreds of thousands or millions of customer bonds, and then re-lend them. Those activities would most likely bring the companies under the SEC’s jurisdiction. A bank or an investment company, Gensler said, might be a better description.
What the SEC chair is saying
- Gensler said, “Some of these are claiming extremely large returns, such as 4%, 8%, or 10% yields, and how are they accomplishing that? It sounds somewhat like an investing firm or a bank.
- “We’re going to keep working with the industry to have these firms properly registered under the securities rules so that we can safeguard the public and fulfill those commitments.”
- Gensler continues by saying that any significant organization dealing with the SEC should anticipate dealing with the Commodity Future Trading Commission (CTFC) as well.
- “Any significant institution collaborates with the Securities and Exchange Commission and the Commodity Futures Trading Commission, their sibling organizations.
- “Our two market regulators are well-equipped with many tools to safeguard the public. The most crucial factor is that we have tried-and-true methods and regulations for trading securities.
- “The main issue is how to acquire many of these underlying tokens, since they are securities,” he concluded.