Gary Gensler, chairman of the US Securities and Exchange Commission (SEC) has said that the crypto industry still needs to come under securities laws in 2022. He stated that the facts and circumstances in the crypto market suggest that a lot of crypto projects are securities.
Gary Gensler is still beating the same gong in 2022
Speaking on CNBC’s Squawk Box, the SEC chair reiterated his stance on the need for regulatory compliance in the cryptocurrency industry. While declining to answer if Ethereum was a security or not, Gensler explained in general that any cryptocurrency project that was raising money from the public needed to bring itself under the U.S. Security Act.
His response was similar when he was asked about the recent ConstitutionDAO project that tried to buy the constitution of the US by crowdfunding with crypto. He continued to sidestep focusing on any one project in his response noting that his office did not allow him to pass verdicts on particular issues on air.
I won’t comment on any one project. But you raised an important point. Crypto tokens, I will call them, are raising money from the public. And are they sharing with the public the same set of disclosures that helps the public decide and are complying with truth in advertising? Gensler asked.
Answering his question, Gensler noted that the major thing he finds to be lacking for the crypto industry to be compliant with the securities laws is full disclosure of information. Gensler stated that he agrees that the crypto industry was innovative, but needed to register with the SEC if it was going to continue raising money from the public.
“There’s thousands of these projects basically trying to raise money from the public so they can back an entrepreneurial idea. That part’s alright. It’s called innovation. But it’s about bringing it into the securities laws.”
He adds that while many crypto projects will argue that they are not securities, “the facts and circumstances suggest that they are investment contracts, they’re securities, and they should register.”
Same old dispute with the crypto industry
The points raised by Gensler are not new to the cryptocurrency community as they have been his stance since last year. However, the community has often pointed out that the SEC while asking the industry to register has not made the process of registration friendly. Crypto proponents that hold this view include Hester Peirce, one of the five SEC commissioners.
Peirce, who has been dubbed “Crypto Mom,” has often spoken out against what she considers to be a lack of regulatory clarity for the crypto industry. In November, while speaking at Bloomberg’s Financial Innovation Summit, she noted that the US had a “fragmented regulatory system.”
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