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SEC Chairman Gary Gensler Raises Concerns Over Crypto’s ‘Widespread Non-Compliance’ with Securities Laws

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US SEC Chairman Gary Gensler’s Position on Crypto

US SEC Chairman Gary Gensler’s Position on Crypto

US Securities and Exchange Commission‘s Chairman Gary Gensler has not yet given his position on crypto despite two losses in court battles.

Legal Battles and Gensler’s Stance

  • The SEC alleged violations of federal securities laws against Ripple and Grayscale.
  • The SEC lost the legal battle consecutively.
  • Gensler still believes that crypto assets are securities and should be regulated by the SEC.
  • Gensler insists on the crypto industry’s “widespread non-compliance with securities laws”.

Gensler’s Stance on Crypto Platforms

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. He stated, “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 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”.

Criticism and Contention

The cryptocurrency sector contends that comprehensive regulations do not adequately consider the distinctive characteristics of digital assets.

Some criticize 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.

Coinbase CEO’s Perspective

Coinbase CEO Brian Armstrong believes that crypto regulation in the United States will happen in a few ways.

  • Armstrong notes that Coinbase is seeing more institutional 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, which might be positive for cryptocurrencies depending on the policy.

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