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SEC to Bolster Scrutiny of Cryptocurrencies, SPACs

May 27, 2021

The Securities and Exchange Commission is poised to zero in on hot-topic asset classes including cryptocurrencies and special purpose acquisition companies, or SPACs, according to news reports.

In remarks prepared for a House Appropriations Committee subcommittee, SEC chairman Gary Gensler said he was looking “forward to working with fellow regulators and with Congress to fill in the gaps of investor protection in these crypto markets,” according to Bloomberg.

At the hearing, Gensler then said he wants the same protections on crypto exchanges that are afforded investors on the New York Stock Exchange or Nasdaq, the news service writes.

Gensler also said that the “surge” in SPACs has put significant demands on the SEC’s resources while still leaving many questions unanswered, according to Bloomberg.

“First and foremost, are SPAC investors being appropriately protected? Are retail investors getting the appropriate and accurate information they need at each stage — the first blank-check [initial public offering] stage and the second target IPO stage? Second, how do SPACs fit in to our mission to maintain fair, orderly and efficient markets? It could be the case that SPACs are less efficient than traditional IPOs,” Gensler said, according to Bloomberg.

Gensler also indicated that the regulator will pay more attention to private equity, adding that he’s already asked staff to review disclosure regulations as well as the structure of relationships between asset managers and limited partners, the news service writes.

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By Alex Padalka
  • To read the Bloomberg article cited in this story, click here if you have a paid subscription.
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Tags:  Regulatory/legal issues , Investment strategies , Portfolio management , Securities and Exchange Commission

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