Chairman Gary Gensler asserts that the US Securities and Exchange Commission (SEC) aims to prove the security status of at least one crypto asset.
Back-to-back lawsuits have been filed by the SEC against two major exchanges, Binance and Coinbase, alleging their failure to register as crypto brokers, exchanges, and clearing agencies.
In an interview on CNBC’s Squawk on the Street with Jim Cramer, SEC chair Gary Gensler highlights the presence of over 200 tokens listed on Coinbase and Binance. However, he emphasizes the Commission’s intention to establish the security status of one of these tokens, necessitating proper registration and implementation of rules against fraud and manipulation as an exchange or broker.
Previously, the SEC chairman asserted that, with the exception of bitcoin, all digital assets are considered securities. He emphasized the requirement for projects that list or offer these “security tokens” to register with the Commission.
Gensler further emphasizes the importance of disclosures to ensure transparency and protect investors. While acknowledging the public’s freedom to choose their investments, he stresses the need for proper disclosures to prevent counterfeiting, scams, and other fraudulent activities. The SEC chief believes that informed decisions can be made by the public when adequate disclosures are provided.
Gary Gensler Focuses on Compliance and Securities
In an interview with Bloomberg, Gary Gensler characterized the lawsuit against Binance and Coinbase as a “straightforward securities case” within the context of the crypto industry. The SEC chairman further claimed that these crypto firms are predominantly designed to evade compliance with securities laws, highlighting concerns about exchanges co-mingling customer funds.
Gary Gensler emphasized the potential collapse of the crypto sector, likening it to a house of cards, unless the industry aligns with fundamental public policies. These policies include disclosure requirements, conflict avoidance, proper segregation of customer funds, and safeguards against fraud and manipulation.
The Commission has recently taken a forceful approach towards the crypto industry, initiating enforcement actions against companies suspected of violating securities laws.
