The Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, explained how securities laws apply to crypto tokens as he outlined the commission’s priorities in regulating the crypto space. “Our role at the Securities and Exchange Commission is to ensure that the public receives basic protections,” he stressed.
SEC President Gary Gensler on Cryptocurrency Regulation
SEC President Gary Gensler discussed cryptocurrency regulation and the agency’s 2022 regulatory agenda on CNBC on Monday.
The chairman explained that, in general, “if you’re raising money from the public, and the public is expecting a profit based on that promoter, the sponsor, and the efforts of that group — that’s within the securities laws, and it’s within the securities laws because Congress is a broad brush.” He explained:
They want to protect you – the investing public – so that you have appropriate information, or what is called complete and fair information, and protect you from fraud, scammers and the like.
Gensler emphasized that investments that call themselves token “still probably, maybe a security.”
While acknowledging that new avenues of investing, including cryptocurrencies and special purpose acquisition companies (SPACs), are “exciting,” the SEC chief emphasized:
Our role at the Securities and Exchange Commission is to ensure that the public receives basic protections.
Gensler also explained, “What’s really old and important is this basic idea that if you raise money from the public and the public is thinking about profit, you have to give them basic disclosures and everything.”
He was also asked to comment on the increase in crowdfunding with cryptocurrencies. The Chairman reiterated that he would not comment on any particular project, saying, “Crypto tokens, I will call them, raise money from the public, and do they share with the public the same set of disclosures that help the public make the decision that they comply with our reality of advertising? Anti-fraud provisions in the Securities Law.
“There are thousands of these projects basically trying to raise money from the public so they can support the idea of entrepreneurship,” the SEC chief described. While emphasizing that he supports innovation, Gensler noted, “It’s about getting it included in the securities laws.” He said:
Unfortunately, many of these are trying to say, “Well, we’re not safe. We’re just something else.”
“I think the facts and circumstances indicate that they are investment contracts, they are securities, and they should be recorded,” Gensler concluded.
He was also asked if Ethereum is a security, noting that the SEC considers XRP as security in an ongoing lawsuit with Ripple Labs and its executives.
However, Gensler declined to comment on whether the ether was safe. The SEC chief confirmed that he would not answer for any cryptocurrency: “I am the chair of a five-member committee that is also a civilian law enforcement agency. So, we don’t participate in these kinds of public forums, we talk about any one project, one possible circumstance, And we provide legal advice over the airwaves in this way.”
What do you think of Securities and Exchange Commission Chairman Gary Gensler’s comments on crypto regulation? Let us know in the comments section below.
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