Gensler Highlights Crypto Misconduct
Gary Gensler, the chairman of the SEC, testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs and discussed the topic of cryptocurrency. Gensler reaffirmed his belief that most crypto tokens should be classified as securities. He emphasized that the vast majority of these tokens likely meet the investment contract test and therefore fall under securities laws. As a result, crypto intermediaries must also comply with these laws.
Gensler expressed concern about the crypto industry, stating that he has never seen a field with so much misconduct in his 44 years of experience in finance.
He described the current state of the industry as one that is plagued by non-compliance, fraud, abuse, and misconduct.
Spot Bitcoin ETFs Under Review
During the hearing, Senator Bill Hagerty inquired about what the SEC requires from issuers to approve spot bitcoin exchange-traded funds (ETFs). This question followed a recent court ruling in favor of Grayscale Investments, which found the SEC’s denial of their spot bitcoin ETF application to be “arbitrary and capricious.” In response, Gensler stated that the SEC is still reviewing this decision and has multiple filings related to bitcoin ETFs. He expressed eagerness to receive recommendations from his staff regarding these filings.
Hot Take: Crypto Industry Faces Regulatory Scrutiny
Gary Gensler’s testimony before the Senate Committee highlights his concerns about the state of the cryptocurrency industry. He believes that most crypto tokens should be treated as securities, citing widespread misconduct within the field. Gensler’s statements reflect a growing push for regulatory oversight and compliance within the crypto space.
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