Gary Gensler’s recent interview with New York Mag (NYMAG) has ruffled feathers across the crypto industry again.
The SEC chair reiterated that he considers all crypto assets and all transitions to be subject to U.S. securities laws, aside from spot trading for Bitcoin.
Although crypto assets have yet to be officially classified, Gensler said “everything other than Bitcoin” is a security.
In his opinion, the people behind all crypto projects and networks are furtively trying to lure investors into buying the tokens.
“There are people behind these cryptocurrencies using a variety of complex and legally opaque mechanisms, but at the most basic level, they are trying to promote their tokens and entice investors.”
Gary Gensler said in an interview with NYMAG: pretty much every sort of crypto transaction already falls under the SEC’s jurisdiction except spot transactions in bitcoin itself and the actual purchase or sale of goods or services with cryptos, “everything other than bitcoin”.
— Wu Blockchain (@WuBlockchain) February 27, 2023
Finance Lawyers Disagree
He argued that at the core, “these tokens are securities because there’s a group in the middle, and the public is anticipating profits based on that group.”
Lawyer and chief policy officer at the Blockchain Association, Jake Chervinsky, argued that Gensler’s words or opinion are not the law. On Feb. 26, he said:
“The SEC lacks authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time.”
The notion has been echoed by SEC Commissioner Hester Pierce, who has urged Congress to accelerate the rollout of legislation and official classification of crypto assets. Until then, regulators such as the SEC will take things into their own hands with these enforcement actions, as they have been doing with gusto this year.
“Using enforcement actions to tell people what the law is in an emerging industry is not an efficient or fair way of regulating,” she said earlier this month in response to the SEC’s Kraken crackdown.
Until there is a robust regulatory framework for digital assets in the U.S., the SEC will continue its war on crypto whether it has the jurisdiction or not.
Crypto Market Outlook
Crypto markets are climbing again this Monday morning in Asia. Total market capitalization is up 2.4% to reach $1.13 trillion, however, it has remained relatively range-bound for most of the month.
Bitcoin had gained 2.2% to trade at $23,600, while Ethereum was up 3.3% to reach $1,644 at the time of writing, according to CoinGecko.
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