Hassan Maishera
TL;DR
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The SEC chair believes that the existing rules apply to cryptocurrencies and no legislation is necessary.
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The regulatory agency has clamped down on some cryptocurrency companies, including Kraken, in recent months.
Gensler Says Existing Rules Apply To Crypto
Gary Gensler, the chairman of the United States Securities and Exchange Commission, believes that the regulatory agency takes the lead in defining what a security is, not necessarily legislation
He mentioned this after a House Appropriations Committee hearing on Wednesday. The SEC chair told reporters that the existing securities laws cover most of the activity that is happening in the crypto market, and no new legislation is needed in this aspect. He said;
“If Congress were to act, though I don’t think we need these authorities, not to undermine inadvertently through definitions of what’s in or out, or in essence allowing for conflicts that we don’t allow. I think there is one agency — the Securities and Exchange Commission, overseen by two committees — the House Financial Services and Senate Banking, and the courts that define what a security is and not individual crypto exchanges selecting that."
Despite his comments, lawmakers have been working on introducing legislation to regulate cryptocurrencies. Senators Kirsten Gillibrand, D-N.Y., and Cynthia Lummis, R-Wyo., have plans to reintroduce legislation next month that would see the Commodity Futures Trading Commission (CFTC) become the major regulator of digital asset commodities, such as bitcoin.
However, Gensler said;
“I think many of the legislative vehicles, if adopted, would undermine the securities remit.”
The hearing comes roughly three days after the CFTC sued Binance for offering unregistered crypto derivative products in the United States. Gensler declined to comment on whether the SEC plans to bring its own actions against Binance but pointed out that the regulatory agency has brought actions against other exchanges, including Kraken.
Gensler told lawmakers that regulations are already in place to govern the crypto market. “They’re called the securities regulation,” he said.
He pointed out that most cryptocurrencies are securities, and companies abroad that sell to US investors would need to abide by the securities law. Gensler concluded that;
“If you’re touching U.S. investors, selling these tokens to U.S. investors, then you come under either the securities laws or the laws under the CFTC.”
The SEC served a Wells notice to Coinbase, one of the largest cryptocurrency exchanges in the United States. The SEC notified that it is currently looking into Coinbase’s activities, products, and services for possible breaches of the law.
