The SEC boss reiterated that “the law is clear” on cryptocurrencies being securities, while others highlighted the lack of regulatory clarity in the U.S.
Another swipe has been taken at the crypto industry by the chair of the United States securities regulator, who claimed many crypto platforms are operating in violation of securities laws.
In an April 27 tweet, Securities and Exchange Commission (SEC) chair Gary Gensler shared a 4-minute video of himself describing crypto assets as “investment contracts” before calling on platforms that offer such products to register with the SEC to protect American investors.
“An Investment contract exists when you invest money in a common enterprise with a reasonable expectation of profits, to be derived from the efforts of others,” he said.
Intermediaries for investment contracts are required to comply with securities laws & register with @SECGov.
— Gary Gensler (@GaryGensler) April 27, 2023
Instead, many crypto platforms are contending that their investment contracts are something else.
The law cares about what something actually is, not what you call it.
“Crypto markets suffer from a lack of regulatory compliance. It's not a lack of regulatory clarity. [...] The law is clear, if you’re a securities exchange, clearinghouse, broker or dealer, you must come into compliance, register with us,” Gensler added.
The SEC has been at the forefront of the U.S. crypto crackdown, with Gensler continually asserting that essentially all crypto assets — apart from Bitcoin (BTC) — fall under the classification of securities.
It’s Gensler’s view that many crypto firms and platforms violate securities laws if they are not registered with the SEC.
In the comments of Gensler’s latest video many were quick to point out that prior to taking the helm at the SEC, Gensler had a completely contradictory view of the crypto market.
weird cause a guy told me three quarters of this space has already been determined by the securities and exchange commission not to be a security pic.twitter.com/0YsRcae3St
— RYAN SΞAN ALTCOIN - rsa.eth (@RyanSAdams) April 27, 2023
Over the past week, a viral video has been circulating across Crypto Twitter where Gensler can be seen lumping crypto in the same category as cash and commodities and describing digital assets as “non-securities.”
Related: Coinbase execs respond to SEC's Wells notice in person and on video
The SEC chair's comments come from a “Blockchain and Money” lecture in 2018 when Gensler was employed as a professor at the Massachusetts Institute of Technology (MIT).
"Three-quarters of the market is non-securities, it's just a commodity, cash, crypto,” Gensler said at the time.
Another one - The below clip is from a Fall 2018 Graduate MIT course called "Blockchain and Money"
— zk- (@ZK_shark) April 27, 2023
Gary Gensler - the current President of the SEC, was the professor.
Once again, I will let the below video speak for itself.
Lecture 8: Public Policy - October 1, 2018
"We'll… pic.twitter.com/rvweW2rz5t
Earlier this month, Gensler was grilled by members of Congress during an April 18 hearing which saw much criticism over his leadership and the SEC’s approach to crypto regulation, which seemingly appears to be regulation by enforcement.
During the hearing, Gensler refused to confirm on record whether he thought Ether (ETH) was a security or not.
Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?
