Gary Gensler has declared that his firm will not discontinue being a “cop on the beat” in reference to promoting cryptocurrencies regardless of the appeals that they are not securities.
In his recent Op-Ed circulated by the WSJ, the U.S. Securities and Exchange Commission chairperson said that he is unable to find any reason for distinguishing between the crypto-assets market and the traditional markets “just because it uses a different technology.” According to the statement given by him, although the US federal securities regulations are more than 85 years old, they usually protected traders, involving those from the crypto field.
“We can dispense with the idea that crypto lending isn’t subject to regulation. On the contrary, the rules have been around for decades. The platforms aren’t following them. Noncompliance isn’t the inevitable result of the crypto business model or underlying crypto technology,” highlighted Gensler.
The ex-investment banker observed that the ongoing industrial happenings have depicted why crypto agencies must work accordingly with securities laws. “In recent months, some crypto lending platforms have frozen their investors’ accounts or gone bankrupt,” Gensler furthered, referring BlockFi. According to Gensler, BlockFi’s dealings made “BlockFi Interest Accounts” the agency’s major product: a security.
It is not the first instance that Gensler has demanded that Cardano, Dogecoin, and other crypto-assets should be monitored within his firm. His tough outlook has, although, made him cause confusion and agitation among people in the crypto field who thought he has ulterior motives for the crypto market.
Referring to Gensler’s OpEd, John Deaton, Founder, Crypto Law, answered back, saying that the SEC chair was illegitimately exaggerating his mandate. For him, as Congress was unable to pass any laws to manage the crypto region after the Howey case, the only body which should be preferred to do the same was the CFTC.
“Gensler has used this perceived lack of clarity to unleash a campaign of regulation by enforcement – stretching Howey beyond recognition,” Deaton said “As a legal theory, it should frighten everyone well beyond the crypto space.”
Gargi Sinha is working as Senior Journalist at Confea. She has completed her Masters in Journalism from Delhi University. She has interest in crypto and blockchain technology.