U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler reiterated that most crypto tokens are securities, saying “the law is clear on this.” However, the Commodity Futures Trading Commission (CFTC) has asked Congress for authority over the crypto spot market, and several bills have been introduced in Congress this year to give the CFTC the necessary authority.
SEC Chairman Gary Gensler on crypto regulation
The question of which federal agency should regulate the crypto market has received a lot of attention recently. While U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has stated that the majority of crypto tokens are securities and should fall under his agency’s jurisdiction, many people and legislators seem to think it should be the Commodity Futures Trading Commission (CFTC), which regulates the crypto sector. Additionally, three bills have been introduced in Congress this year to make the CFTC the regulator of the crypto markets.
In an interview with CNBC on Monday, Gensler answered questions about who should regulate the crypto sector, the SEC chief explained.
Our agency is the agency that oversees this basic bargain. When entrepreneurial groups raise money from the public and the public expects to benefit, they need disclosure – full, fair and truthful disclosure – and that is the core bargain in our capital markets.
The SEC chairman continued. ‘You can take risks, but the person raising the money, or the person raising the money, needs to disclose all sorts of information to you.’ That is how our capital markets work best and the SEC is very good at this and that is what we do.” He emphasized.
The law is clear on this. I believe, based on the facts and circumstances, that most of these tokens are securities.
On Monday, at a Financial Stability Oversight Council (FSOC) meeting presided over by Treasury Secretary Janet Yellen, Gensler reiterated.” Of the approximately 10,000 tokens in the crypto market, the majority are securities. The offering and sale of these crypto securities tokens is subject to securities laws. Given that most crypto tokens are securities, it follows that many crypto intermediaries are trading in securities and must register with the Securities and Exchange Commission in some form.”
Regarding the SEC working with the CFTC, Gensler stressed that.
To the extent that crypto intermediaries may someday need to register with both the SEC and the Commodity Futures Trading Commission (CFTC), I would note that we currently have dual registrants in the broker-dealer arena and the fund advisory arena.
Meanwhile, the CFTC is asking Congress for authority over the crypto cash market; CFTC Chairman Rostin Behnam explained last week that the CFTC does not currently oversee the cash market because it is a derivatives regulator. Therefore, he told Congress, “cash authority, so we can get into the bitcoin cash market, the ether cash market, and other digital commodity tokens (markets),” the CFTC chief explained last week.
He also said that because crypto is a new asset class, the SEC and CFTC need to “figure it out legislatively.” In contrast to traditional asset classes,” Behnam said, adding, “this asset class has different components and characteristics.” We must rely on 70-year-old case law to determine what is a security and what is a commodity.”
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