U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler explained how securities laws apply to cryptocurrency tokens as he outlined the commission’s priorities in regulating the crypto space. “Our role at the SEC is to ensure that the public still has basic protections,” he stressed.
SEC Chairman Gary Gensler on Crypto Regulation
SEC Chairman Gary Gensler discussed cryptocurrency regulation and the agency’s 2022 regulatory agenda on CNBC on Monday.
The chairman explained that, in general, “if you’re raising money from the public and the public expects a profit based on the efforts of that promoter, sponsor, that group — that’s within the scope of the securities law, and it’s within the scope of the securities law. , because Congress uses big strokes.” He elaborated:
They want to protect you – the investing public – so that you have proper information, or so-called complete and fair information, and protect you from fraud and scams, etc.
Gensler stressed that an investment calling itself a token “may still be a security.”
While acknowledging that new investment approaches, including crypto tokens and special purpose acquisition companies (SPACs) are “exciting,” the SEC chairman emphasized:
Our role at the SEC is to ensure that the public still has basic protections.
Gensler explained further: “An old and really important basic idea is that if you’re raising money from the public and the public is thinking about making a profit, you have to provide them with basic disclosures and everything.”
He was also asked to comment on the increase in crowdfunding using cryptocurrencies. Reiterating that he would not comment on any particular project, the chairman elaborated: “Crypto tokens, I would call them, are raising money from the public, do they share with the public that helps the public decide and they comply with our Advertising truth? Call it the anti-fraud provisions of securities law.”
“There are thousands of projects like this that are basically trying to raise money from the public so they can back a startup idea,” the SEC chairman described. While emphasizing his support for innovation, Gensler noted that “it’s to bring it into securities law.” He argued that:
Unfortunately, too many of them try to say, ‘Well, we’re not securities. We are just something else.
“I think the facts and circumstances indicate that they are investment contracts, they are securities, and they should be registered,” Gensler concluded.
He was also asked if ethereum was a security, citing the SEC’s view that Ripple As security in ongoing litigation with Ripple Labs and its executives.
However, Gensler declined to comment on whether ether is a security. The SEC boss reiterated that he would not answer any kind of cryptocurrency, saying: “I am the chairman of a five-member committee that is also a civil law enforcement agency. So we don’t engage in these types of public forums to talk about any A project, a possible situation, and providing legal advice over the air in that way.”
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