In his most recent testimony before the House Appropriations Committee, Gary Gensler, Chairman of the US SEC, said that the United States had a perfectly suited law for the cryptocurrency business.
According to a report (1), Gensler asserted that the existing Securities law already applies to crypto businesses and that there is no requirement for additional laws in this area.
“If Congress were to act, though I don’t think we need all these officials, not to subvert accidentally through meanings of what’s in or out, or in essentially allowing for conflict that we don’t allow,” Gensler said.
Gary Gensler has had a highly fruitful career as a public servant throughout his entire life. He is currently serving as Chairman of the Securities and Exchange Commission (SEC), in addition to having previously held the same position at the Commodities Futures Trading Commission (CFTC).
Gensler, who has a solid understanding of the operational & regulatory principles that both agencies adhere to, believes that the SEC, in conjunction with its regulators, is in the greatest position to define what exactly constitutes a security.
“I think there is one agency – the Securities and Exchange Commission, overseen by two committees – the House Financial Services and Senate Banking, and the courts that define what a security is and not individual crypto exchanges selecting that,” Gensler later said (2).
Since industry executives have continued to criticize the Securities and Exchange Commission (SEC) and lawmakers for the lack of clearly defined regulations controlling the cryptocurrency environment, the cryptocurrency business in the United States is in a very unsettled state.
Stakeholders are particularly incensed with the SEC due to the string of enforcement actions that have been taken against Kraken Exchange, Paxos Trust, and even Coinbase Global Inc so far in 2018.
The allegation is that the authority does not provide clarification on what factors contribute to the security of assets, with some of the crackdowns being certain to result in legal battles.
Foreign Securities Trading Companies Must Register
According to the Chairman of the SEC, any platform for trading securities based outside of the United States must register with the American market.
According to Gensler, “if you are touching American investors and selling these tokens to US investors, then you come into compliance with either the securities laws or the regulations under the CFTC.”
Even if there is a lack of clarity in the rules, the chairman of the SEC has stated on multiple occasions that any attempt to adopt new laws will disrupt the status quo.
“I believe that many of the legislative vehicles if enacted, would weaken the securities remit,” he said. “I have no doubt about that.”
In an effort to position the Commodity Futures Trading Commission (CFTC) as the preeminent regulatory body for the nascent cryptocurrency industry, a group of pro-crypto US Senators, including Sens.
Kirsten Gillibrand, D-N.Y., and Cynthia Lummis, R-Wyo., are working on a bill that will alter the entire regulatory landscape for cryptocurrencies.
Gensler believes that the industry possesses all it requires to fall under the purview of the law, despite the fact that it is not yet obvious what the regulatory approach will be if this Bill is passed and enacted as a law.