Bitcoin attracts more attention from regulators worried about fraud

0

Regulators are signaling they want more control over a larger cryptocurrency universe that has pushed Wall Street business further without the investor and consumer protections that apply to traditional securities and financial services.

The catch: No regulator inspects crypto exchanges or brokers, unlike securities and derivatives markets. Regulators only step in when they believe U.S. law applies to a particular cryptocurrency or transaction, depending on how the asset was sold or traded.

Once an original asset that required browsing special exchanges to buy, cryptocurrencies can now be easily purchased on the mobile apps of PayPal Holdings Inc., Square Inc.’s Cash app, and Robinhood Markets Inc.

“A lot of money is invested in it, there is a lot of trading and uses seem to be growing,” said Dan Berkovitz, commissioner at the Commodity Futures Trading Commission. “I see a concern as to whether we have a developing shadow financial system, and that should be a question for all regulators.”

Securities and Exchange Commission chairman Gary Gensler told House lawmakers that investor protection rules should apply to crypto exchanges, similar to those that cover stocks and derivatives. Regulated exchanges are required by law to have rules that prevent fraud and promote fairness. But crypto exchanges do not face such a standard, Gensler said at the Piper Sandler Global Exchange and FinTech conference last month.


Source link

Leave A Reply

Your email address will not be published.