Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), has criticized the cryptocurrency industry for its lack of compliance. Speaking at the Piper Sandler Global Exchange & Fintech Conference on Thursday, Gensler argued that crypto exchanges can register with the agency, despite platforms’ claims that they have tried to do so. He stated that “crypto intermediary compliance isn’t possible” is a notion that he disagrees with and recent history disproves it. Gensler acknowledged that compliance requires work, but it’s not just a matter of paying lip service to the desire to comply with applicable laws or seeking meetings with the SEC during which changes needed to comply with securities laws are not made.

Gensler’s comments come after the SEC brought charges against Binance and Coinbase. The SEC accused Coinbase of operating its platform without being registered as an exchange broker or clearing agency. On the other hand, Binance and its CEO Changpeng Zhao were accused of multiple offenses, including misleading investors, unlawfully operating as an exchange, among other charges. The SEC claimed that while Binance “touted its efforts to analyze crypto assets,” it had for years made available for trading crypto assets that are investment contracts.

Gensler Asserts that Cryptocurrencies are Securities

Gensler also reiterated his belief that many cryptocurrencies are securities during his speech. He argued that cryptocurrencies are not growing out of the ground like corn or wheat, and their digitization doesn’t differentiate them from huge swaths of the capital markets, where securities and currencies are already digital.

Moreover, Gensler pushed back against crypto firms claiming that they lacked fair notice that they were operating illegally. He stated that if crypto asset market participants go on Twitter or TV and say they lacked “fair notice” that their conduct could be illegal, it should not be believed. Gensler argued that they may have made a calculated decision to take the risk of enforcement as the cost of doing business.

Coinbase has been arguing that the industry has no fair notice on how to proceed since regulators cannot agree on who regulates which aspects of crypto. The SEC and the Commodity Futures Trading Commission have evaluated different parts of the crypto industry, calling some crypto securities and other commodities. Lawmakers in Washington are working on legislation to give clearer authority between the two.

Gensler’s criticisms of the crypto industry highlight the importance of compliance and regulation in the sector. Despite the industry’s claims that compliance is not possible, Gensler argues that it is necessary and achievable. Moreover, his assertion that cryptocurrencies are securities underscores the need for clearer regulatory guidance to ensure that the industry operates within the confines of the law.

Blockchain

Articles You May Like

Binance to Launch Japanese Exchange After Buying SEBC
Creditors of Celsius Network Add Wintermute to Lawsuit Over Alleged Wash Trading
Top Trending Cryptocurrencies on DEXTools Today
Aave’s Lens Protocol Raises $15 Million for Decentralized Social Media

Leave a Reply

Your email address will not be published. Required fields are marked *