3 - 6 minute read
The Chair of the United States securities regulator, Gary Gensler, has recently taken aim at the crypto industry, claiming that many crypto platforms are operating in violation of securities laws. Gensler shared a 4-minute video of himself describing crypto assets as “investment contracts” before calling on platforms that offer such products to register with the SEC to protect American investors. He stated that intermediaries for investment contracts are required to comply with securities laws and register with SEC.
The SEC has been at the forefront of the US crypto crackdown, with Gensler continually asserting that essentially all crypto assets – apart from Bitcoin – fall under the classification of securities. It’s Gensler’s view that many crypto firms and platforms violate securities laws if they are not registered with the SEC.
Gensler’s comments have caused quite a stir among the crypto industry, with many pointing out that prior to taking the helm at the SEC, Gensler had a completely contradictory view of the crypto market. Over the past week, a viral video has been circulating across Crypto Twitter where Gensler can be seen lumping crypto in the same category as cash and commodities and describing digital assets as “non-securities.”
Intermediaries for investment contracts are required to comply with securities laws & register with @SECGov.
— Gary Gensler (@GaryGensler) April 27, 2023
Instead, many crypto platforms are contending that their investment contracts are something else.
The law cares about what something actually is, not what you call it.
During an April 18 hearing, Gensler was grilled by members of Congress, who criticized his leadership and the SEC’s approach to crypto regulation, which seemingly appears to be regulation by enforcement. During the hearing, Gensler refused to confirm on record whether he thought Ether was a security or not.
Intermediaries for investment contracts are required to comply with securities laws & register with @SECGov.
— Gary Gensler (@GaryGensler) April 27, 2023
Instead, many crypto platforms are contending that their investment contracts are something else.
The law cares about what something actually is, not what you call it.
The crypto markets suffer from a lack of regulatory compliance. It’s not a lack of regulatory clarity. The law is clear – if you’re a securities exchange, clearinghouse, broker or dealer, you must come into compliance, register with us.
Another one – The below clip is from a Fall 2018 Graduate MIT course called "Blockchain and Money"
— zk-🦈 (@ZK_shark) April 27, 2023
Gary Gensler – the current President of the SEC, was the professor.
Once again, I will let the below video speak for itself.
Lecture 8: Public Policy – October 1, 2018
"We'll… pic.twitter.com/rvweW2rz5t
The Bottom Line
Gary Gensler’s recent comments regarding the classification of crypto assets as “investment contracts” and the need for platforms to register with the SEC highlights the importance of regulatory compliance in the crypto industry. Traders should be aware of the potential risks and opportunities associated with investing in crypto assets, especially those that could be classified as securities. Increased regulation and scrutiny from the SEC could lead to significant market moves, and traders should stay informed and updated on any developments.
