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Cryptocurrency exchanges continue to feel the heat from the Securities and Exchange Commission over what regulators say is a lack of protection for people who invest in digital currencies.

On Wednesday, SEC Chairman Gary Gensler and former SEC chair Jay Clayton discussed the skyrocketing growth of cryptocurrencies such as bitcoin and ethereum at the Digital Asset Compliance & Market Integrity Summit. 

The pair acknowledged the promise of new payment technologies but flagged the potential for fraud, scams and other abuse without the right investor backstops.

“I think new technologies do not persist for long if they stay outside the public policy framework,” Gensler said at the event, according to a Markets Media report. “If you are a proponent of projects or this space, then you should know that without trust the public is not going to stay in sufficient numbers that you want in the long-term.”

Clayton, who served in the role under former President Donald Trump, agreed with his successor that crypto exchanges and issuers need to comply more with existing securities laws.

He cited attempts by some in the industry to bypass those laws during his time at the helm of the SEC.

“In this marketplace, there were a lot of people who…thought they could throw a fastball by the regulators and decided that they were going to take their chances of pushing the regulatory envelope with the hope that regulation would come in that direction,” he said, according to a report from MarketWatch.

Gensler said the SEC would “use the enforcement tool,” with crypto exchanges as needed, but that, “I think a better approach for these platforms … is to work to get registered within the law,” he said during the event, according to the MarketWatch report. 

It noted that the largest U.S.-based cryptocurrency exchanges – Coinbase Global, Kraken Inc. and FTX US – are regulated by federal and state authorities but not as securities exchanges.

Gensler, who took over the top SEC job in the spring – with a promise to increase transparency and reduce risk – recently described cryptocurrency as the “Wild West,” while asking lawmakers to give his agency more power to regulate it. 

He said the legislative priority should center on crypto trading, lending, and DeFi platforms.

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