• SEC Chair Gary Gensler claims that many crypto platforms are operating in violation of securities law
• He calls for platforms offering these products to register with the SEC to protect American investors
• The SEC has been at the forefront of the US crypto crackdown, with Gensler continually asserting that essentially all crypto assets — apart from Bitcoin — fall under the classification of securities
SEC’s Gary Gensler Takes Aim at Crypto
The Chair of the United States Securities and Exchange Commission (SEC), Gary Gensler, recently took another swipe at the cryptocurrency industry. In a video posted on April 27th, Chairman Gensler reiterated his position that “the law is clear” on cryptocurrencies being securities. This statement follows a series of regulatory clampdowns by the SEC on cryptocurrency firms throughout 2021.
Gensler’s Stance on Crypto
In his video, Chairman Gensler asserted 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”. As such, he argued that intermediaries for investment contracts must comply with securities laws and register with the SEC. He also criticized some crypto platforms for contending that their investment contracts are something other than securities.
SEC Crackdown
The SEC has been leading an initiative to crack down on unregistered crypto firms who may be violating U.S. securities laws. To this point, Chairman Gensler has continuously maintained that essentially all cryptocurrencies – excluding Bitcoin – should be classified as securities and regulated accordingly by registering with the SEC.
Criticisms Against Gensler
Many have pointed out what they perceive as an inconsistency between Chairman Gensler’s current stance regarding crypto regulation and his prior views during public appearances before taking office at the SEC. Notably, a viral video circulated across social media showed him lumping cryptocurrency in with cash and commodities as non-securities earlier this year.
Conclusion
It remains to be seen how effective Chairman Gensler will be in regulating cryptocurrencies within U.S markets or if he will backtrack from his hardline position against digital assets anytime soon; however it is clear that he will continue to press for greater transparency among those offering virtual asset services moving forward