US SEC Chairman Gary Gensler: Encrypted Assets Subject to Securities Law

02/27/2023 07:38 • NFT Newsflash • 145 views

According to reports, Gary Gensler, chairman of the United States Securities Commission, reiterated in a recent interview with New York magazine (NYMAG) that all encrypted assets and all transactions are subject to the United States securities law, except for Bitcoin spot transactions.

Lawyer of Blockchain Association: Gensler’s remarks or opinions are not laws, and SEC has no right to supervise any of them

Interpret the above information:

In a recent interview with New York magazine (NYMAG), Gary Gensler, the Chairman of the US Securities Commission, underscored the regulatory oversight of the agency on crypto assets, except for Bitcoin spot transactions. This move represents a continuation of the SEC’s efforts to demarcate its boundaries in the wild and evolving world of digital assets, which has been met with mixed reactions from investors, speculators, and stakeholders.

Gensler’s comments highlight the SEC’s regulatory stance on encrypted assets, as well as many other platforms offering cryptocurrency services. The agency has stressed the importance of decentralized finance and how it fits into existing regulatory frameworks in the past, which has become a topic of debate among industry experts. The latest remarks from the agency head show that there is a need to balance innovation in the digital asset industry with investor protection.

Gensler made it clear that the SEC would not make any exceptions in how the law is applied to crypto platforms, particularly Initial Coin Offerings or ICOs, which he described as synonymous with security offerings. This statement follows the SEC’s crackdown on unregistered ICOs, which resulted in significant financial penalties and the halting of some trading platforms. The SEC, according to Gensler, holds that cryptocurrencies should be considered as securities if an asset has been sold with an expectation of return or as a form of investment.

Furthermore, Gensler emphasized that all crypto platforms or exchanges should register with the SEC, either as mutual funds or exchanges, which may subject them to additional costs and compliance obligations. The regulatory scrutiny is primarily targeted at US-based entities in the crypto market, which may see a decline in their user base if market participants seek more liberal environments offshore.

In conclusion, the comments from Gary Gensler highlight the SEC’s continued focus on regulating the digital asset market in a manner consistent with investor protection. With the regulatory landscape for crypto assets still under development, Gensler’s viewpoint will undoubtedly spark considerable debate among industry experts and investors alike. In effect, regulators must also tread lightly in a market that is considered revolutionary and fast-moving. Nevertheless, the SEC has signaled that it will continue to monitor the sector closely and enforce the applicable securities regulations, which could significantly impact market dynamics in the future.

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