SEC Chair Takes One More Shot at Crypto: Details
- SEC Chair Gary Gensler released a 4-minute video taking shots at the crypto industry, claiming them to be “investment contracts.”
- “Crypto platforms are contending that their investment contracts are something else,” he said, asking them to register their offerings as securities.
- “It doesn’t matter if you call yourself onshore or offshore. If you make securities available to American investors, you must comply with American laws.”
- Videos of the SEC Chair calling three-quarters of the cryptocurrencies similar to cash and commodity 2018 have gone viral on social media.
The situation in the US regarding the regulation of digital assets is worsening, as many crypto firms have deemed the regulatory environment in the country unsuitable to work with. Furthermore, the Chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, has played a major role in the same. It is crucial to note that Gensler took another shot at the cryptocurrencies, stating that these blockchain-based tokens are securities.
Gensler has been quite vocal regarding his views on cryptocurrencies, stating multiple times that companies that provide services related to digital assets should register themselves with the regulator. However, leading crypto companies in the US, like Coinbase, claim that meeting with the regulator several times to initiate the registration process yielded no positive results.
Interestingly, on April 27, Gensler shared a 4-minute video of himself describing crypto assets as “investment contracts” while asking crypto exchanges and other related companies to come and register with the regulator and follow its guidelines, which remain unclear.
He said that “many crypto platforms are contending that their investment contracts are something else” and stated that “the law cares about what something actually is, not what you call it.”
The Chair said that “an investment contract exists when you invest money in a common enterprise with a reasonable expectation of profits, to be derived from the efforts of others,” while adding:
“Crypto markets suffer from a lack of regulatory compliance. It’s not a lack of regulatory clarity. […] The law is clear, if you’re a securities exchange, clearinghouse, broker or dealer, you must come into compliance and register with us.”
“It doesn’t matter if you call yourself onshore or offshore. If you make securities available to American investors, you must comply with American laws,” Gensler said.
On the other hand, the crypto community was quick to point out that prior to his appointment as the Chairman of the Commission, Gensler had different views regarding cryptocurrencies.
Videos of Gensler have gone viral in the crypto community, wherein he stated that cryptocurrencies can be considered commodities and compared to cash while describing digital assets as “non-securities.” These comments come from the “Blockchain and Money” lecture in 2018, when he was employed as a professor at the Massachusetts Institute of Technology (MIT).
“Three-quarters of the market is non-securities; it’s just a commodity: cash, crypto,” Gensler said in the MIT lecture.
Users also pointed out the Gensler’s inability to answer if Ether (ETH), the world’s second-largest digital asset, is a security or a commodity.
As recently reported by BitcoinWisdom, the Chairman of the United States House Financial Services Committee, Patrick McHenry, brought up the Commission’s “punishing” of digital asset firms through regulation and enforcement without a clear path to compliance in an oversight hearing.
“Clearly an asset cannot be both a commodity and a security,” said McHenry. “I’m asking you, sitting in your chair now, to make an assessment under the laws as they exist: is Ether a commodity or a security?”
Gensler was unable to answer the question above directly, giving vague replies to stall the Congressman. The crypto community asked McHenry to impeach Gensler and “constrain him from doing further vandalism immediately.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
