Gary Gensler’s Views on Crypto Regulation
In his testimony to the U.S. House Committee on Financial Services, Gary Gensler, Chair of the SEC, shared his perspective on the regulation of cryptocurrencies. He emphasized that cryptocurrencies should not be exempt from U.S. securities laws, as these laws encompass a broad range of financial instruments beyond traditional assets like stocks and bonds.
Crypto Intermediaries and Regulatory Compliance
Gensler highlighted the need for crypto intermediaries to comply with securities laws if most crypto tokens are considered securities. He pointed out specific sections of the Securities Exchange Act of 1934 that require intermediaries such as exchanges, brokers, and dealers to register or meet exemption requirements.
Concerns about Noncompliance and Enforcement Actions
Gensler expressed concern about widespread noncompliance in the crypto industry, likening it to the pre-regulation financial landscape. The SEC has already taken enforcement actions to hold violators accountable and protect investors.
SEC’s Role in Rulemaking and Regulatory Proposals
Gensler discussed the SEC’s proactive approach to rulemaking in the crypto industry. The commission has issued a reopening release clarifying existing rules for crypto trading platforms, including decentralized finance systems. Additionally, the SEC has proposed updates to investment adviser custody rules to cover all crypto assets and enhance protections provided by qualified custodians.
Limitations on Comments
Gensler concluded by stating his openness to discussing the SEC’s work but noted that he could not comment on ongoing litigation.
Hot Take: Gary Gensler Advocates for Comprehensive Crypto Regulation
In his testimony, Gary Gensler makes a strong case for subjecting cryptocurrencies to U.S. securities laws. He emphasizes the need for regulatory compliance among crypto intermediaries and expresses concern about noncompliance in the industry. Gensler also highlights the SEC’s active role in rulemaking and proposes updates to enhance investor protection. This testimony signals Gensler’s commitment to comprehensive regulation in the crypto space, aiming to address potential risks and ensure market integrity.
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