Home Markets Crypto community balks at SEC Chairman Gensler’s assertion that regulation of capital markets, crypto should be the same

Crypto community balks at SEC Chairman Gensler’s assertion that regulation of capital markets, crypto should be the same

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Crypto community balks at SEC Chairman Gensler’s assertion that regulation of capital markets, crypto should be the same

A recent tweet from the SEC Chairman Gary Gensler clarified its stance on crypto markets, saying they should be treated the same as other capital markets, regardless of digital assets using “different technology”.

“There is no reason to treat the crypto market any differently than the rest of the capital markets just because it uses different technology..”

Crypto Markets Cannot Escape Securities Laws

Specifically, people was referring to US securities laws as they apply to crypto lending. Using the National Traffic and Motor Vehicle Safety Act of 1966 as an analogy to protect motorists, the SEC chairman said the securities laws of the 1930s also protected investors.

“We can do without the idea that crypto lending is unregulated. On the contrary, the rules have been around for decades. The platforms do not follow them.

Gensler referred to the recent market turmoil, in which some CeFi lenders froze withdrawals and/or filed for bankruptcy, adding that these types of events are precisely why crypto firms should comply with securities laws. movables.

Elaborating on this point, the SEC Chairman suggested that some crypto platforms are dodging “proven investor protections” by relabeling a product or the associated promised benefits. However, citing legal precedent, Gensler said the economic realities of a product, not its labels, determine whether securities laws apply.

With that, he criticized non-compliant platforms that operate as if they had a choice. More so, those who deliberately choose to flout the law.

“Rather, it’s like these platforms saying they have a choice – or even worse, saying ‘Catch us if you can’.

It should be noted, addressing the FT In September 2021, Gensler also warned crypto platforms that they were at risk of “survival” if they ignored existing frameworks. He also mentioned that crypto assets “are no different from others” when it comes to public policy.

The community responds

Twitter users took the opportunity to hit back at Gensler; notable themes included ignore indiscretions of major banks and investment managers and accusations of hindrance crypto markets.

Several prominent crypto figures have also intervened to advance the issue of crypto regulation. For example, the founder of the Bankless media, ryan adams, asked Gensler if he had engaged with the crypto community. With that, Adams issued an invitation to appear on the show Bankless.

However, Tony Edwards of the Thinking Crypto podcast was less kind in calling on Gensler to treat crypto markets the same as other markets. Edwards argued that the global distribution of tokens, which is typical of a cryptocurrency project, warrants an entirely new approach from regulators.

Currently, there is a tussle between the SEC and the Commodities and Futures Trading Commission (CTFC) over the regulation of digital assets. It is proposed that cryptocurrencies qualified as goods fall under the jurisdiction of the CTFC.

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