FILE PHOTO: Commodity Futures Trading Commission Chairman Gary Gensler testifies at a U.S. Senate Banking Committee hearing on systemic risk and market oversight on Capitol Hill in Washington May 22, 2012. REUTERS/Jonathan Ernst
WASHINGTON (Reuters) -New investment rules are needed to help protect investors as social media, apps and other technology impact trading and financial markets, the head of the U.S. Securities and Exchange Commission (SEC) said on Friday.
Gary Gensler, who took over as the regulator's chairman last month, told CNBC in an interview that while investors can take risks more protections are needed amid the rise in "crypto tokens" and fierce stock rallies driven by online posts.
"We need to update and freshen our rules," he said, adding that such protections help economic growth and capital formation by boosting confidence in the markets and making risks transparent.
Crypto tokens, or cryptocurrencies, were especially ripe for regulation to help tamp out fraud, manipulation and bad actors, he said.
"Bringing investment protection to that market is relevant if this is going to continue, and it brings confidence and trust to the overall markets," Gensler added.
(Reporting by Susan Heavey; Editing by Lisa Lambert and Chizu Nomiyama)
