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U.S. securities regulator says crypto events underscore industry risks

Published 11/09/2022, 04:19 PM
Updated 11/09/2022, 05:34 PM
© Reuters. FILE PHOTO: Representation of cryptocurrency Binance Coin, the native token of the cryptocurrency exchange, is seen in this illustration taken November 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

By Chris Prentice

WASHINGTON (Reuters) -The turmoil in the cryptocurrency industry of the last few days underscores the risks inherent in the industry as intermediaries handle so many core functions, the head of the top U.S. markets regulator said on Wednesday.

Securities and Exchange Commission (SEC) Chair Gary Gensler used the events of the last few days - centered on concerns over the financial healthy of major cryptocurrency exchange FTX - to emphasize the risks of a crypto industry that has been operating outside of traditional financial markets' oversight.

"I've been saying this for well over a year now in this job: come in, get registered, come within the securities laws," Gensler said during a Healthy Markets Association event.

© Reuters. FILE PHOTO: Representation of cryptocurrency Binance Coin, the native token of the cryptocurrency exchange, is seen in this illustration taken November 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Gensler noted risks from the "commingling" of key intermediary functions in the cryptocurrency world, in which the same firms serve multiple roles, such as exchanges and market makers.

Cryptocurrencies have historically fallen into regulatory gray areas. The SEC, which is investigating FTX's handling of client funds, has ratcheted up scrutiny of the crypto industry under Democratic leadership.

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