Cryptocurrency regulations are a much-debated topic in the past, and the current regulatory clearance is no different, which is why the new Security Exchange Commission (SEC) chairman Gary Gensler is now referring to the cryptocurrency sphere as the Wild West of the digital payments world.
The word on the media circles is that the new SEC chair is going hard on the cryptocurrency regulations, and the situation doesn’t look very promising for the cryptocurrency sphere.
The cryptocurrency sphere has been in muddy waters when it comes to regulatory clarity, and Gensler is out for a clampdown on the cryptocurrency sphere with the idea that consumers need to be protected at all costs.
In a media interview earlier on Tuesday, Gensler expressed that the cryptocurrencies, despite being an exceptional invention, still fail to come at par with the currencies when it comes to the three basic functions, which include the medium of exchange, the store of value, and the unit of account.
Gensler expressed that his opinion is not the official stance of the SEC, but his opinion speaks volumes when it comes to what to expect from Gensler in the days to come.
The former Goldman Sachs employee also applauded the vision put forth by Satoshi Nakamoto back in the day but is largely concerned about the current state of the cryptocurrency sphere.
The new SEC Chairman is of the view that they are more of a vehicle for speculative investment than a store of value in its current form. He furthers that it can be called a “highly speculative” store of value, but with the volatility attached, the cryptocurrencies are still not at par with regular currency when it comes to the medium of exchange.
While on the other hand, it is already being used for money-laundering and having taxation issues, ransomware extortion in examples such as Colonial Pipeline.
In his recent media appearance, he focused on the illegal uses of the cryptocurrency despite the fact that only 0.5 percent of all cryptocurrency and blockchain transactions have been used for illegal activities, per the reports.
While in the case of Colonial Pipeline, authorities managed to confiscate some amount of ransom received in Bitcoin after checking the public ledger that showed where the Bitcoins were parked before cashing out.
Gensler, however, emphasized that the present regulatory loopholes lead to lesser investor protection in crypto than he would like to see. Adding that at present, the cryptocurrency realm is “like the Wild West”.
He further expressed that if the issues are not addressed, people can get hurt. This hints at his intentions to take up the regularity framework and tighten the belt around Bitcoin and other cryptocurrencies. This raises various eyebrows in the cryptocurrency realm, from day traders to investors to hodlers to big whales all alike.
Also read: The Bitcoin Market Remains Unfazed by the US Crypto Tax Proposal