U.S. Securities and Exchange Commission Chair Gary Gensler has again called for cryptocurrencies to be classified as securities and urged crypto companies to register with the agency. In an event organized by the Practising Law Institute on Sept. 8, he said the crypto industry doesn't need new guidelines and that the SEC's existing rules apply to it. His speech touched on several controversial aspects of the crypto industry, including matters on crypto intermediaries and stablecoins.
- U.S. Securities and Exchange Commission Chair Gary Gensler said most of the cryptocurrencies are securities and there won't be any new guidelines for the crypto industry.
- His speech spotlighted crypto intermediaries, stablecoins, and other crypto-related issues.
- Crypto participants aren't excited about the SEC's lack of provision for the new guidelines.
No Guidance For Crypto
Gary Gensler clarified how the existing rules by the SEC guide the crypto industry, whether it concerns token issuance or other services like lending. In his view, most crypto or tokens qualify as investment contracts. In particular, Gensler spoke about stablecoins' potential to be securities depending on how they're pegged. He clarified that there's no need to establish any special rules for the industry yet. “Nothing about the crypto markets is incompatible with the securities laws,” he said.
Gensler double-downed that a wide range of services provided by crypto intermediaries, such as an exchange, broker-dealer, clearing agent, or custodian, is under the SEC's purview and should be registered accordingly. This is because these intermediaries may act as traditional security platforms since they operate order books and facilitate crypto transactions, he said.
While addressing the audience of attorneys, Gensler said, "If you fall into any of these buckets [crypto service provider], come in, talk to us, and register." "Don't wait for us to knock on your door."
Support to Congress
Gensler said he would support Congress giving a sister regulator of the SEC more authority in the oversight of cryptocurrencies such as bitcoin.
He said the Commodity Futures Trading Commission will look forward to working with Congress to gain more authority to oversee and regulate "nonsecurity tokens and their intermediaries."
The Bottom Line
This is perhaps the clearest indication yet that the SEC will continue to regulate the crypto industry based on existing rules. It is not good news for crypto entrepreneurs and enthusiasts who hoped that one-day financial watchdog would make some regulations according to crypto's structure.