Garry Gensler

SEC Chairman Garry Gensler takes another dig at Crypto

  • Coinbase sues SEC for not publishing regulatory guidelines for Digital assets including Crypto
  • SEC Chairperson Garry Gensler call Cyptos as non-securities and that the Crypto world is plagued by a lack of regulations.

Garry Gensler, Chairman of the Securities and Exchange Commission, took his crypto-critical message to the web again on Thursday with a new investor-protection video, warning people about digital-assets enterprises that are abusing securities rules.

While the SEC chairman underlined that “the law is clear” on cryptocurrencies being securities, others emphasized the lack of regulatory clarity in the United States.

The chair of the United States Securities and Exchange Commission took another shot at the crypto business, claiming that many crypto platforms are breaking securities regulations.

Crypto Firms vs SEC

The SEC’s comments came just days after cryptocurrency exchange Coinbase sued the SEC, requesting that the agency be forced to publicly publish its response to a months-old petition on whether the crypto business should be regulated using existing SEC standards.

Coinbase, which received a Wells notice in March signaling that enforcement action could be coming ahead, has argued that the SEC has been inconsistent in its treatment of cryptocurrencies and that the market requires regulatory certainty.

Since January, the SEC has taken action against Bittrex and Gemini, as well as the crypto lender Genesis and a number of individual actors accused of manipulating crypto assets, including crypto entrepreneur Justin Sun and disgraced Terraform Labs founder Do Kwon.

Gensler’s Message

Securities and Exchange Commission Chair Garry Gensler published a 4-minute video of himself characterising crypto assets as “investment contracts” in an April 27 tweet before urging platforms that provide such goods to register with the SEC to protect American investors.He further explained that an investment contract only exists when the investment is made with an enterprise with a reasonable expectation of profit.

Crypto marketplace plagued by a lack of regulatory compliance. There is no shortage of regulatory clarity. Gensler further noted that the law is clear and that it states any securities exchange, clearing house, broker or dealer must register with the SEC.   

The SEC has been in the vanguard of the US crypto crackdown, with Gensler consistently asserting that, with the exception of Bitcoin (BTC), all crypto assets fall under the classification of securities. According to Gensler, many cryptocurrency firms and platforms violate securities laws if they are not registered with the SEC.

The last week, a video of Gensler has been viral and circulating on Crypto Twitter, in which he can be seen lumping crypto in with cash and commodities and referring to digital assets as “non-securities.” The SEC chair’s remarks are based on a “Blockchain and Money” lecture given by Gensler in 2018 while he was a professor at the Massachusetts Institute of Technology (MIT).

Gensler also mentioned that Non-securities like Commodity, Cash, and Crypto make up almost Three-quarters of the Market.

Earlier this month,during an April 18 hearing, Gensler was challenged by members of Congress about his leadership and the SEC approach to crypto regulation, which appears to be regulation by enforcement. Gensler refused to say whether he considered Ether (ETH) to be a security or not.