“Under our laws, they have to register with the Commission unless they qualify for an exemption,” said Gary Gensler.
Gary Gensler, chair of the United States Securities and Exchange Commission, is once again urging crypto projects with securities to register with the regulatory body to ensure thinvestors are protected.
In a prepared statement for his testimony at the Senate Committee on Banking, Housing, and Urban Affairs scheduled for Sept. 14, Gensler said the Securities and Exchange Commission, or SEC, was working with the Commodities Futures Trading Commission for investor protection in crypto markets. In addition, he hopes to develop a policy framework by working with the Federal Reserve, Department of Treasury, Office of the Comptroller of the Currency, and President Joe Biden’s Working Group on Financial Markets.
“I’ve suggested that [crypto] platforms and projects come in and talk to us,” said the SEC chair. “Many platforms have dozens or hundreds of tokens on them. While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that, with 50, 100, or 1,000 tokens, any given platform has zero securities.”
Gensler added that innovative technology such as crypto can be a “catalyst for change” in the financial sector, but not if it continued to stay outside the framework set up by lawmakers — something many crypto firms in the U.S. have argued is due to a lack of regulatory clarity.
“To the extent that there are securities on these trading platforms, under our laws they have to register with the Commission unless they qualify for an exemption.”
Gensler hoped to introduce crypto-related policy changes surrounding token offerings, decentralized finance, stablecoins, custody, exchange-traded funds and lending platforms. He has long urged crypto projects to register with the SEC, specifically saying they should “come in” and work with regulators.
“We just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” said Gensler. “Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications.”
Gensler is scheduled to speak at a full hearing of the Senate Committee on Banking, Housing, and Urban Affairs regarding oversight of the SEC at 10:00 am EST on Sept. 14.