SEC’s Gensler Cautions $2T Crypto Space Needs Oversight for Survival

The $2.1 trillion cryptocurrency trading space has grown so large so fast that it’s too big to survive without regulatory oversight, Securities and Exchange Commission (SEC) Chairman Gary Gensler told the Financial Times on Wednesday (Sept. 1).

He said that without a regulatory framework, the crypto industry could lose the public’s trust despite the popularity the trading space is now experiencing. 

“History just tells you, it doesn’t last long outside. Finance is about trust, ultimately,” Gensler told FT. The cryptocurrency market had a value of over $2.1 trillion on Wednesday, according to Coinmarketcap.

See also: SEC Chair Wants More Crypto Oversight Authority

Gensler said he asked crypto platforms to voluntarily register with the SEC and feels many “would do better engaging.” Instead, he said they ask for forgiveness instead of permission.

The SEC boss took the helm in April and has some street cred regarding crypto — he taught a course on the subject at the Massachusetts Institute of Technology. 

Gensler is scheduled to testify on Wednesday (Sept. 1) before the European Parliament’s committee on economic and monetary affairs (ECON) to exchange views on “transatlantic cooperation in the field of financial services,” according to the ECON website.

See also: Former SEC Enforcer: Watchdogs, Crypto Firms Need Open Dialogue

Regulators in the U.S. and around the world are increasingly becoming more concerned over the volatile cryptocurrency market and how best to provide oversight. Gensler has said he considers most as securities and has asked that Congress empower the SEC to govern the market.

See also: SEC Has Long Road Before DeFi Regulatory Framework Is Ready

Gensler said that it’s especially important that there is oversight for decentralized finance (DeFi) platforms, but it is also particularly difficult since there is no central broker. Regardless, he points out that DeFi is “not really a new concept” and the platforms have “a fair amount of centralization,” he told FT.