SEC Chair Gary Gensler remains steadfast in his tough stance on cryptocurrencies, as indicated by his written remarks ahead of his testimony on SEC oversight.
Gensler Emphasized The Crypto Industry's Noncompliance With Securities Rules
SEC Chair Gary Gensler remains steadfast in his tough stance on cryptocurrencies, as indicated by his written remarks ahead of his testimony on SEC oversight.
Gensler emphasized the industry's noncompliance with securities rules, drawing comparisons to the problems encountered prior to the introduction of federal securities laws in the 1920s. While Gensler is slated to testify on a variety of topics, his comments on cryptocurrency will be eagerly monitored by an industry seeking for regulatory certainty in the United States.
Gensler restated his stance that existing securities rules in the United States are enough to handle cryptocurrencies, citing the Howey Test, and that most crypto tokens likely meet the investment contract test. However, he has not explicitly clarified how the Howey Test applies to specific coins like Ethereum, although in an interview he suggested that "everything but Bitcoin" could be considered a security.
The distinction between securities and commodities determines whether specific tokens and firms are subject to SEC or Commodity Futures Trading Commission regulation. This controversy has spurred debate and even suspicions of a turf war between the two agencies.
Crypto enthusiasts say that a regulatory approach oriented on enforcement does not adequately serve investors or issuers. Republican legislators wrote a letter in April blaming the regulator's approach for a lack of clear standards and a nonexistent road for crypto trading firms to register with the SEC.
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