US Securities and Exchange Commission (SEC) Chairman Gary Gensler has asked staff at the SEC to fine-tune compliance for crypto tokens and intermediaries. He emphasized that most crypto tokens are securities.
SEC Chairman Gary Gensler on Crypto Regulation
US Securities and Exchange Commission (SEC) Chairman Gary Gensler spoke about crypto regulation and compliance at the Practicing Law Institute’s SEC Speaks conference on Thursday.
Noting that the main principles of the SEC rules apply to all securities markets, including securities and intermediaries in the crypto market:
Of the nearly 10,000 tokens in the crypto market, I believe many are securities. Offers and sales of these thousands of crypto-security tokens are covered under securities laws.
Gensler acknowledges that some crypto tokens may not meet the definition of security. “While these represent the total value of the crypto market, they may only represent a small number of tokens,” he commented.
For example, Bitcoin, the largest by market capitalization, has already indicated that it is a commodity and falls under the Commodity Futures Trading Commission (CFTC).
The chairman of the SEC described bitcoin during his speech on Thursday:
Bitcoin, the first crypto token, is called by some ‘digital gold’: traded as a precious metal, speculative, scarce – yet digital – store of value.
Gensler has called for some people in the crypto industry to seek more “guidance” about crypto assets. Over the past five years, the commission has “spoken eloquently here through the DAO report, the Munchee order, and dozens of enforcement actions, all of which have been voted on by the commission,” he said.
Emphasizing the importance of investor protection, the SEC chief said:
I have asked SEC staff to work directly with entrepreneurs to ensure their tokens are registered and regulated, as collateral if necessary.
“Under the current regime, very few crypto-security tokens have been registered,” he said. However, given the nature of crypto investments, “it may be appropriate to be flexible in applying existing disclosure requirements,” he said.
Regarding crypto intermediaries, Gensler detailed: “I have asked staff to work with intermediaries to ensure that they are documenting each of their activities – exchange, broker-dealer, custodianship, and so on.
He concluded: “I look forward to working with crypto projects and intermediaries that want to comply with the rules. I look forward to working with Congress on a variety of legislative initiatives while maintaining the strong authorities we have today.
Gensler explained:
I asked our staff to consider using our regulatory tool to adjust compliance for crypto security tokens and intermediaries.
On Friday, the SEC revealed its plan to establish an independent office to review documents related to crypto assets.
What do you think of SEC Chairman Gary Gensler’s comments? Let us know in the comments section below.
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