WASHINGTON—The Securities and Exchange Commission will police cryptocurrency markets to the maximum extent possible, Chairman Gary Gensler said Tuesday, repeating his call for Congress to grant the agency more authority and resources to regulate the sector.
“Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West,” Mr. Gensler said in prepared remarks to the Aspen Security Forum. “We have taken and will continue to take our authorities as far as they go.”
U.S. financial regulators have struggled to get their arms around the fast-growing world of cryptocurrency and related financial technologies. Unlike in the securities and derivatives markets, no single regulator oversees crypto exchanges or brokers. As the market value of the asset class has exploded, so have scams.
“Right now, large parts of the field of crypto are sitting astride of—not operating within—regulatory frameworks that protect investors and consumers, guard against illicit activity, ensure for financial stability, and…protect national security,” Mr. Gensler, a veteran Democratic regulator who taught a course on cryptocurrency at the Massachusetts Institute of Technology, highlighted a range of areas in which the SEC could expand its oversight.
One of them is decentralized finance, or DeFi, applications that allow users to borrow, lend, earn interest and trade assets and derivatives. The services are often used by people seeking to borrow against their cryptocurrency holdings to place larger bets.