Securities and Exchange Commission (SEC) Chairman Gary Gensler expressed concern on June 14 that the new crypto law could undermine existing broad market regulations.
The response was expected from the policy maker, which has been working hard for its agency to control crypto and treat most assets as securities.
The new regulations bill was introduced on June 7 by Senators Cynthia Loomis and Kirsten Gillibrand, proposing to make the CFTC the industry’s primary regulator. This has been backed by industry executives and pro-innovation policy makers as it would result in many assets being classified as commodities such as gold rather than securities such as company shares.
Speaking at the Wall Street Journal’s CFO Network Summit this week, Gensler said crypto should effectively be treated on a par with traditional banking and finance markets.
“We don’t want to dilute the security we have in the $100 trillion capital market. That’s how it should be treated.”
Responding to the recent sharp drop in cryptocurrency prices, he said, “the urgency is highlighted, but there is urgency.”
The Lummis-Gillibrand bill aims to create a complete regulatory framework for crypto assets, headed by the CFTC. However, Congress is unlikely to pass due to the presence of several anti-crypto lawmakers such as Senator Elizabeth Warren.
The bill also proposes new concepts in the nearly 90-year-old securities laws. This would allow some token issuers more leeway than public corporations.
Gensler said the agency was not trying to expand its jurisdiction, but reaffirmed its stance that cryptocurrencies are securities, adding that “these tokens are being offered to the public, and the public is looking forward to a better future.” These are the characteristics of an investment contract.”
CFTC chief Rostin Behnum also approved the Lumis-Gillibrand bill last week, saying it very well addresses the distinction between a commodity and a security.
SEC Bullying Tactics
On June 13, Ripple’s General Counsel Stu Alderotti accused the SEC of trying to “bully, bulldoze and bankrupt crypto innovation in the US” through its threats, enforcement actions, and efforts to expand jurisdiction. .
“Like a hammer that wants everything to be a nail, the SEC is keeping everything obscure, so it can argue that every crypto is a security.”
This week, Gensler also pointed out the yields offered on some crypto platforms are “too good to be true.”
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