SEC head Gary Gensler is again saying all crypto projects and businesses should register with the agency.
In a speech at an event organized by the Practising Law Institute, Gensler said the “vast majority” of cryptocurrencies are securities, and crypto-investors who purchase them should be receiving the protections they get from regulated broker-dealers. He said, “Investors deserve disclosure to help them sort between the investments that they think will flourish and those that they think will flounder. Investors deserve to be protected against fraud and manipulation.”
Gensler’s remarks echoed what he had said in another interview in July, when he said crypto should be fit into the existing disclosure regime for financial assets like equities, so investors could benefit from the 90 year old securities laws.
He said, “Over the generations, Congress has refined and amended these key statutes, adding, amongst other things, oversight of clearing agencies and the over-the-counter market for securities.”
On Thursday he went on to say that in his estimation most crypto tokens clearly qualify as securities under the so-called Howey test.
U.S. Rep Raja Krishnamoorthi (D-IL), the Chair of the Subcommittee on Economic and Consumer Policy, sent letters requesting information on steps being taken to protect consumers from cryptocurrency scams and fraud, to four federal agencies and five digital asset exchanges.
In addition, a House subcommittee on Economic and Consumer Policy has sent letters to five crypto exchanges and three other federal regulators requesting information on the measures each is taking to combat crypto-fraud.
Shortly thereafter, crypto exchange Coinbase Global (COIN) noted in a blog post that of the thousands of Crypto tokens which seek listings on its exchange, “around 90% never get considered for listing as they do not meet our strict requirements for protection against scams like ‘pump-and-dumps’ and ‘rug pulls.’”
Gensler also made the case that lending of crypto-assets should also fall under the same requirements. He also noted that even non-security tokens like bitcoin, which should fall under the Commodities and Futures Trading Commission’s (CFTC) jurisdiction, require, “greater authorities with which to oversee and regulate” them.
Gensler said, “To the extent that crypto intermediaries may need to register with both the SEC and the CFTC, I would note we currently have dual registrants in the broker-dealer space and in the fund advisory space.” Gensler noted, that this required a joint effort in conjunction with Congress, saying, “Let’s ensure that we don’t inadvertently undermine securities laws underlying $100 trillion capital markets. The securities laws have made our capital markets the envy of the world.”
The Daily Financial Trends
