Gary Gensler’s Testimony Highlights Need for Crypto Regulations
In an upcoming testimony, Gary Gensler, Chair of the SEC, will emphasize the argument that most cryptocurrencies should be considered securities. Gensler has been vocal about his belief that crypto should be subject to securities regulations, stating that crypto intermediaries must comply with securities laws. In his testimony before the US Senate Committee on Banking, Housing, and Urban Affairs, Gensler will discuss the evolving nature of financial products and the need for updated regulations. He will also emphasize that the majority of crypto tokens meet the investment contract test. However, Gensler will not comment on the SEC’s ongoing litigations against major exchanges Coinbase and Binance.
SEC’s Legal Action Against Coinbase and Binance
The SEC filed lawsuits against Coinbase and Binance on June 5th and 7th, respectively, accusing both exchanges of offering unregistered crypto services. While the recent ruling in the SEC’s lawsuit against Ripple determined that XRP is not a security for retail purposes, it classified it as a security for institutional sales. The SEC plans to appeal the ruling, and it could potentially impact other ongoing litigations against Coinbase and Binance. The court approved the motion to appeal, and the case is expected to be heard in the second quarter of 2024.
Hot Take: Gensler Continues Push for Crypto Regulations
Gary Gensler’s upcoming testimony reinforces his belief in the need for crypto to be regulated as securities. By arguing that most crypto tokens meet the investment contract test, Gensler asserts that investors and issuers in the crypto asset securities markets should be protected by securities laws. While the SEC’s ongoing litigations against Coinbase and Binance were not addressed in the testimony, the Ripple ruling’s classification of XRP as a security for institutional sales could potentially impact these cases. Gensler’s stance highlights the evolving nature of financial products and the necessity for updated regulations to ensure investor protection.
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