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In his speech, chairman of the Securities and Exchange Commission (SEC) Gary Gensler spoke about the regulation of cryptocurrencies. He stated that companies issuing tokens in cryptocurrency do not need guidance. The Chairman also stressed the clarity of the current laws and regulations governing the activities of cryptocurrency issuers and service providers.
In addition, he stated that nothing in the cryptocurrency markets violates securities laws. This is a clear sign that the SEC will continue to regulate the cryptocurrency sector in accordance with the current rules.
This is bad news for those who expected the financial regulator to pass legislation in line with the structure of cryptocurrencies.
Comments of Gary Gensler on the regulation of cryptocurrencies
During his prepared speech at the SEC Speaks event, Gensler stated that regulators should cooperate to establish clear laws regarding cryptocurrency and investment to protect investors. Gary Gensler agreed that cryptocurrencies should be classified as securities, and urged cryptocurrency companies to register with the organization.
At an event sponsored by the Practical Law Institute on September 8, he stated that the crypto industry does not require new regulations and that current SEC standards still apply. He spoke about crypto intermediaries, stablecoins and other sensitive topics of the cryptocurrency market.
Gary Gensler explained how the current SEC rules govern the cryptocurrency industry, whether it’s issuing tokens or providing other services like lending. He believes that most cryptocurrencies or tokens are investment contracts. Gensler specifically mentioned the ability of stablecoins to function as securities depending on their pegging.
He made it clear that there was no longer a need to develop special rules for the sector. He recently stated that securities regulations do not contradict anything related to cryptocurrency markets.
Gensler said he would support Congress by giving an SEC subsidiary more authority to regulate cryptocurrencies like Bitcoin. He also said the Commodity Futures Trading Commission seeks to work with Congress to improve its ability to track and control “non-securities tokens and their intermediaries.”
SEC Concerns About Bankruptcies
In his speech, Gensler briefly mentioned credit card companies, saying they are subject to his agency’s regulation if they provide securities. He stressed the risks for investors, pointing out that some of them have declared bankruptcy and restricted users’ access to their money. According to him, customer funds are frozen by firms that have not declared bankruptcy.
“Our safety regulations contain fundamental safeguards against this. If you invest in any service providers or platforms, you won’t get basic insurance against fraud or manipulation.”
Gensler used the SEC’s agreement with cryptocurrency lender BlockFi as an example of how businesses can sign up with an organization. However, he avoided discussing any other specific firms.
Stablecoins can qualify as securities
To sum up, Gensler’s main claim was that there is no need for additional rules or laws as existing regulations govern cryptocurrency activities. In his speech, Gensler mentioned stablecoins as another category where investor rights are required.
According to Gensler, stablecoins can qualify as securities depending on how they are pegged, whether interest is paid on them and how they are traded. He also stated that this is by no means an exhaustive list.
A key takeaway is that when determining whether a product is a crypto-security token, a non-crypto-security token, or another tool, it’s important to consider its facts and conditions, not its name.
Digital Commerce Chamber (CDC) vs SEC
Meanwhile, the Digital Commerce Chamber (CDC), which protects the rights of investors in the United States, accused the SEC of unreasonable regulation of the crypto industry. She is going to take part in the sec’s litigation – Ripple.
Author: Elvir, Analyst Freedman Club Crypto News
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