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“Under our laws, they are required to register with the Commission unless they qualify for an exemption,” Gary Gensler explained.
Gary Gensler, the chairman of the United States Securities and Exchange Commission, is asking crypto ventures using securities to register with the regulatory agency once more to protect investors.
In a prepared statement for his testimony at the Senate Committee on Banking, Housing, and Urban Affairs scheduled for Sept. 14, Gensler said the Securities and Exchange Commission, or SEC, was working with the Commodities Futures Trading Commission for investor protection in crypto markets. In addition, he hopes to develop a policy framework by working with the Federal Reserve, Department of Treasury, Office of the Comptroller of the Currency, and President Joe Biden’s Working Group on Financial Markets.
“I’ve suggested that [crypto] platforms and projects come in and talk to us,” said the SEC chair. “Many platforms have dozens or hundreds of tokens on them. While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that, with 50, 100, or 1,000 tokens, any given platform has zero securities.”
Gensler went on to say that creative technology like cryptocurrency may be a “catalyst for change” in the financial sector, but only if it stays outside the framework set up by politicians, which many crypto firms in the United States have contended is due to a lack of legal clarity.
“To the extent that there are securities on these trading platforms, under our laws they have to register with the Commission unless they qualify for an exemption.”
As previously reported in August, Gensler planned to implement crypto-related regulatory reforms pertaining to token offerings, decentralised finance, stablecoins, custody, exchange-traded funds, and lending platforms. He has long urged cryptocurrency startups to register with the SEC, explicitly urging them to “come in” and collaborate with regulators.
“We just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” said Gensler. “Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications.”
Gensler is scheduled to speak at a full hearing of the Senate Committee on Banking, Housing, and Urban Affairs regarding oversight of the SEC at 10:00 am EST on Sept. 14.