SEC Chairman Gary Gensler Continues To Criticize Crypto With “Widespread Non-Compliance” With Securities Laws
US Securities and Exchange Commission’s Chairman Gary Gensler has not yet given his position on crypto despite two losses in court battles.
Over the past few months, the SEC alleged violations of federal securities laws against Ripple and Grayscale. After months of court battles, the SEC lost the legal battle consecutively. Despite the legal setbacks, the US SEC Chairman still believes that crypto assets are securities and should be regulated by the SEC. Gensler insisted that the crypto industry’s “widespread non-compliance with securities laws” for the distress facing the sector this past few months.
During the September 12th Senate hearing, Gensler reiterated his stance that crypto platforms and intermediaries must register as exchanges, broker-dealers, and clearing agencies with the SEC. “There is nothing about the crypto asset securities markets that suggests that investors and issuers are less deserving of the protections of our securities laws,” Gensler stated.
The SEC Chairman also justified the agency’s current spate of enforcement actions against major crypto firms stating, “Given this industry’s wide-ranging noncompliance with securities laws, it’s not surprising we’ve seen many problems”.
However, the cryptocurrency sector has contended that comprehensive regulations do not adequately consider the distinctive characteristics of digital assets. Furthermore, some have criticized the SEC for attempting to extend decades-old securities regulations to emerging crypto financial models such as DAOs and DeFi protocols, accusing the agency of overstepping its bounds.
Meanwhile, Coinbase CEO Brian Armstrong has explained that crypto regulation in the United States will happen in a few ways. Armstrong has noted that Coinbase is seeing more constitutional investors coming in and signing up as they seek “a flight to quality”. He also believes that there’s a possibility that the SEC will just get a different chairman in 2024 and beyond. That might be positive for cryptocurrencies, although it depends mainly on the policy.
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