Gary Gensler Asks SEC Staff to Fine-Tune Crypto Compliance – Says ‘Vast Majority Are Securities’ Crypto Briefing

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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has revealed that he has instructed SEC staff to fine-tune compliance for crypto-tokens and intermediaries. He pointed out that the vast majority of crypto tokens are securities.

SEC Chairman Gary Gensler on Crypto Regulation

Gary Gensler, Chairman of the United States Securities and Exchange Commission (SEC), spoke about crypto regulation and compliance at the Practicing Law Institute’s SEC Speaks conference on Thursday.

Noting that the Fundamentals of the SEC Bylaws apply to all securities markets, including securities and crypto market intermediaries, he said:

Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. The offers and sales of these thousands of crypto security tokens are covered by securities laws.

Gensler admitted that some crypto tokens may not meet the definition of a security. “These probably only represent a small number of tokens, even though they can represent a significant portion of the overall crypto market value,” he said.

For example, he previously stated that bitcoin, the largest cryptocurrency by market cap, is a commodity and falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC).

The SEC Chairman described bitcoin during his speech on Thursday:

Bitcoin, the first crypto token, is referred to by some as “digital gold”: trading like a precious metal, a speculative, rare — but digital — store of value.

Gensler pointed out that some people in the crypto industry have called for more “direction” when it comes to crypto assets. He pointed out that over the past five years, the Commission “has spoken with a pretty clear voice here: through the DAO report, the Munchee order, and dozens of enforcement actions, all passed by the Commission”.

Stressing the need to protect investors, the SEC boss said:

I have instructed SEC staff to work directly with entrepreneurs to have their tokens registered and regulated, where applicable, as securities.

He noted that “a handful of crypto security tokens have registered under the existing regime.” Nonetheless, he acknowledged that given the nature of crypto investments, “it may be appropriate to be flexible in applying existing disclosure requirements.”

Regarding crypto intermediaries, Gensler detailed, “I have directed staff to work with intermediaries to ensure they register each of their functions – exchange, broker-dealer, custodial functions, etc.”

He concluded, “I look forward to working with crypto projects and intermediaries seeking to comply with laws. I also look forward to working with Congress on various legislative initiatives while maintaining the strong powers we currently have.

Gensler revealed:

I have asked staff to consider using our regulatory toolkit to potentially fine-tune compliance for crypto security tokens and intermediaries.

On Friday, the SEC unveiled its plan to create a dedicated office to review filings related to crypto assets.

What do you think of SEC Chairman Gary Gensler’s comments? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

Image credits: Shutterstock, Pixabay, Wiki Commons

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