Gary Gensler, chairman of the securities and Exchange Commission, told the House Financial Services Committee hearing that investors lacked protection when trading bitcoin on large exchanges.
Gensler pointed out that although the US Securities and Exchange Commission currently has the power to regulate digital currency, in fact, the transaction of cryptocurrency is a supervision blank. Bitcoin is a commodity under U.S. law and is therefore not subject to the strictest rules of the sec.
"The SEC currently has a lot of power in the securities sector, and some cryptocurrencies fall within this jurisdiction, but in some areas, especially bitcoin trading on large exchanges, the public is not really protected at present," he said
Gary Gensler's comments on cryptocurrency are the clearest so far on how he plans to regulate the nascent industry. For months, there has been speculation that Gensler, who taught cryptocurrency at MIT, will take a more tolerant stance on cryptocurrency.