Thursday, September 29, 2022

SEC Chair Maintains Stance on Crypto, Asks Staff to Work With Token Issuers

MThe U.S. Securities and Exchange (SEC) Chairman Gary Gensler is set to appear before the United States Senate Committee on Banking, Housing and Urban Affairs. However, it appears he is not ready to back down on his longtime view of cryptocurrencies. For the longest time, Gensler has shared the view that a large percentage of existing cryptocurrencies are unregistered securities.

According to a prepared speech which he is to give at an upcoming testimony before the senate committee, Gensler has once again reiterated the fact.

Gary Gensler Issues New Directive to SEC Staff

In his prepared remarks, Gensler directed the SEC staff to cooperate with token issuers as this will ease them into compliance. He gave the instruction while also admitting that “a small portion” of tokens may not be securities. This small portion, however, constitutes the major share of the entire crypto market’s value. represent a significant portion” of the crypto market’s aggregate value is non-securities.

It is worth mentioning that Gensler has only publicly declared Bitcoin a commodity. He has repeatedly avoided stating whether or not Ethereum is a security. This is even as investors seek clarity on the status of the second-largest cryptocurrency.

Exchanges Encouraged to Carry Out Dual Registration

The SEC chair has also identified the need to adopt disclosure requirements that will be flexible enough for exchanges. This he said “might be appropriate,” especially considering the nature of cryptocurrencies.

Gensler insists that since most of the crypto exchanges (decentralized and centralized alike) have securities listed, they must still register with the SEC. He believes that this is the only way to ensure investor protection.

Despite insisting on registering with the SEC, Gensler also admitted that exchanges might also want to register with the Commodity Futures Trading Commission (CFTC) as well. He says by doing this, both securities and non-securities can trade alongside each other just fine. Interestingly, some broker-dealers already hold dual registrations, says Gensler.

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