For SEC’s Gary Gensler, crypto assets are securities
For SEC’s Gary Gensler, crypto assets are securities
Crypto

For SEC’s Gary Gensler, crypto assets are securities

By Amelia Tomasicchio - 5 Oct 2022

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According to the chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, almost all crypto assets would be securities: “the law is clear on this,” he said in fact.

Therefore, most tokens and cryptocurrencies should fall under the SEC‘s sphere of influence, although many citizens and lawmakers believe that it should be the Commodity Futures Trading Commission (CFTC) that regulates the industry.

The topic is very hot, seeing, for example, that the dispute between the SEC and Ripple is still ongoing and whether XRP is a security or not is still an open case.

Not for nothing, as many as three bills have also been submitted to the U.S. Congress this year to make the CFTC the real regulator of cryptocurrencies.

Gary Gensler wants the SEC to regulate crypto

Anyway, in an interview on Monday with CNBC, Gensler responded to a question about who should regulate the cryptocurrency industry, explaining it should be the SEC:

“Our agency is an agency that oversees this basic bargain. When a group of entrepreneurs is raising money from the public and the public is anticipating a profit, they need disclosure — full, fair, and truthful disclosure, and that’s the core bargain in our capital markets.You get to take the risk but the person raising money or the persons raising money has to disclose various information to you. That’s how our capital markets work best, and the SEC is very good at this and that’s what we do. The law is clear on this. I believe based on the facts and circumstances, most of these tokens are securities.”

Just last Monday, during the Financial Stability Oversight Council (FSOC) meeting chaired by Treasury Secretary Janet Yellen, Gensler also reiterated: 

“Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. Offers and sales of these crypto security tokens are covered by the securities laws. Given that most crypto tokens are securities, it follows that many crypto intermediaries are transacting in securities and have to register with the Securities and Exchange Commission in some capacity.”

Regarding the SEC’s cooperation with the CFTC, however, Gensler stressed:

“To the extent that crypto intermediaries may need to one day register with both the SEC and the Commodity Futures Trading Commission (CFTC), I would note we currently have dual registrants in the broker-dealer space and in the fund advisory space.”

CFTC wants to regulate crypto

Meanwhile, the CFTC has asked Congress for authority over the crypto market. Indeed, CFTC Chairman Rostin Behnam explained last week that because the CFTC is a derivatives regulator, it does not currently oversee cash markets. 

Therefore, it has asked Congress for “cash authority so that it can enter the Bitcoin market, the Ether market, and other digital commodity token markets,” the CFTC chief explained last week.

He also said the SEC and CFTC will have to “figure that out legislatively” because cryptocurrency is a new asset class:

“There are different components and characteristics of this asset class as opposed to traditional asset classes. We have to rely on 70-year-old case law to determine what’s a security, what’s a commodity.”

Nasdaq confused by crypto regulation

It is no coincidence that today Tal Cohen, the Executive Vice President of Nasdaq, explained that he expects clear regulation for the cryptocurrency market in order to launch his own crypto exchange.

In fact, in an interview conducted by Bloomberg, Cohen explained that for the time being there are too many crypto exchanges and therefore the sector is well saturated, and that in order to launch a crypto exchange for institutional investors, Nasdaq would need clear regulation.

Amelia Tomasicchio

As expert in digital marketing, Amelia began working in the fintech sector in 2014 after writing her thesis on Bitcoin technology. Previously author for several international crypto-related magazines and CMO at Eidoo. She is now the co-founder and editor-in-chief of The Cryptonomist. She is also a marketing teacher at Digital Coach in Milan and she is writing a book about NFTs for the Italian publishing house Mondadori, while she is also helping artists and company to entering in the sector.

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