Gary Gensler, the Chairperson of the U.S. Securities and Exchange Commission (SEC), remains firm in his belief that crypto assets should be classified as securities, despite facing legal challenges. He argues that the turmoil within the crypto industry is primarily due to a failure to comply with securities laws.
Gensler draws parallels between the current discrepancies in the crypto market and the economic depression of the 1920s, which led to the establishment of securities regulations. This belief will be the centerpiece of his presentation at the upcoming Senate Committee on Banking, Housing, and Urban Affairs hearing on September 12th.
One key factor that Gensler emphasizes is the importance of the Howey test in determining whether an asset or transaction qualifies as a security. He argues that since most crypto tokens are subject to securities laws, crypto intermediaries should also adhere to these regulations.
It is worth noting that the SEC, under Gensler’s leadership, recently faced legal defeats in cases against Ripple and Grayscale. These entities were accused of violating federal securities statutes, but judgments were passed in their favor.
Gensler also plans to shed light on two significant proposals by the SEC. One proposal focuses on regulating the custody of crypto assets, while the other aims to redefine the term ‘exchange’ to encompass cryptocurrency platforms comprehensively.
The crypto community eagerly awaits the Senate Committee hearing to determine if Gensler’s stance on crypto has changed. In previous statements, he implied that, apart from Bitcoin, all other cryptocurrencies should be treated as securities. However, the classification of Ethereum remains ambiguous, leading to friction between the SEC and the Commodity Futures Trading Commission (CFTC).
Critics of Gensler’s regulatory approach highlight the lack of clarity in current crypto laws in the United States. They argue that the SEC’s enforcement-based approach may not be the most effective method of regulation.
In conclusion, Gary Gensler maintains his belief that crypto assets should be considered securities, even in the face of legal challenges. He plans to use the impending Senate Committee hearing to highlight the need for adherence to securities laws in the crypto industry. The classification of Ethereum remains a point of contention, and critics question the SEC’s enforcement-based regulatory approach.
