Biden's SEC chair nominee Gary Gensler signals more regulation for cryptocurrencies

Washington, DC

THE US Securities and Exchange Commission (SEC) appears likely to work on its first guidelines for cryptocurrencies after President Joe Biden's nominee to lead the agency promised to provide "guidance and clarity" to the rapidly evolving market.

Speaking during his confirmation hearing before the Senate Banking Committee on Tuesday, Gary Gensler offered the first thoughts on handling cryptocurrencies if he is confirmed to lead the top US markets regulator.

"Bitcoin and other cryptocurrencies brought new thinking to payments but raised new issues of investor protection we still need to attend to," Mr Gensler told lawmakers, describing them as "catalysts for change".

As SEC chairman, he would promote the new technology while ensuring investor protections, he said.

The SEC has not adopted rules specifically tailored to cryptocurrencies and how they should be treated by people and companies, which some argue has created an unclear rulebook.

"It's important for the SEC to provide guidance and clarity," Mr Gensler said. "Sometimes that's a clarity that will be a thumbs up, but even if it's thumbs down, it's important to provide that."

As a decentralised asset created by users, Bitcoin is likely exempt from securities laws. But there is a "strong case" that digital currencies created and issued by companies have likely violated securities law, Mr Gensler said at a conference in 2018.

Bitcoin hit record highs last month after companies including car-maker Tesla and Mastercard said they were embracing the cryptocurrency. REUTERS