The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, talked about the regulation of cryptocurrency Monday at an event hosted by the University of Pennsylvania Carey Law School.
“The SEC’s remit is overseeing the capital markets,” the SEC chief began, adding that the agency has a “three-part mission: protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets.”
Noting that the SEC is concerned about regulating crypto “platforms, stablecoins, and crypto tokens,” Gensler stressed:
There’s no reason to treat the crypto market differently just because different technology is used. We should be technology-neutral.
The chairman of the SEC said: “I’ve asked staff to consider how best to register and regulate platforms where the trading of securities and non-securities is intertwined.” He elaborated:
In particular, I’ve asked staff to work with the Commodity Futures Trading Commission (CFTC) on how we jointly might address such platforms that might trade both crypto-based security tokens and some commodity tokens, using our respective authorities.
Gensler emphasized that more rules are needed to oversee cryptocurrency exchanges citing that retail investors are currently vulnerable to scams and market manipulation.
The SEC chairman has said many times that many crypto tokens on platforms that have 50, 100, or even 5,000 coins listed are likely securities. He said:
My predecessor Jay Clayton said it, and I will reiterate it: Without prejudging any one token, most crypto tokens are investment contracts under the Howey Test.
Recently, U.S. Senators Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) unveiled their plan to introduce a broad-based regulatory framework for cryptocurrency. According to the framework, some aspects of the industry will be regulated by the CFTC and some will be overseen by the SEC.
Senator Lummis specifically said that the CFTC will have a greater role under the new crypto framework. “When you look at bitcoin and ethereum in particular, it’s pretty clear to me those are commodities,” she explained.
In August last year, two U.S. lawmakers urged Gensler and the acting chairman of the CFTC to establish a joint working group for the regulation of crypto assets.