US Securities and Exchange Commission (SEC) Chairman Gary Gensler has reiterated that most crypto tokens are securities, stressing that “the law is clear on this.” However, the Commodity Futures Trading Commission (CFTC) has asked Congress for authority over crypto spot markets, and several bills were introduced in Congress this year to give the CFTC the necessary authority.
SEC Chairman Gary Gensler on crypto regulation
The question of which federal agency should regulate the crypto market has attracted a lot of attention lately. While US Securities and Exchange Commission (SEC) Chairman Gary Gensler has said that the majority of crypto tokens are securities and should fall under the purview of his agency, many people and legislators believe it should be commodity futures trading should Commission (CFTC) that regulates the crypto sector. Additionally, three bills were introduced in Congress this year to make the CFTC the regulator of crypto markets.
In an interview with CNBC on Monday, Gensler responded to a question about who should regulate the crypto sector. The SEC chief explained:
Our agency is an agency that oversees this basic business. When a group of entrepreneurs raises money from the public and the public expects to make a profit, they must be disclosed – full, fair and truthful disclosure, and that is core business in our capital markets.
The SEC Chairman continued, “You have to take the risk, but the person or people raising money must disclose various information to you. That’s how our capital markets work best, and the SEC is very good at it, and that’s what we do.” He emphasized:
The law is clear on this. I believe based on the facts and circumstances that most of these tokens are securities.
On Monday, at the Financial Stability Oversight Council (FSOC) meeting chaired by Treasury Secretary Janet Yellen, Gensler reiterated, “Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. Offerings and sales of these crypto security tokens fall under securities laws. Because most crypto tokens are securities, many crypto intermediaries trade securities and are required to register with the Securities and Exchange Commission to some extent.”
Regarding the SEC’s cooperation with the CFTC, Gensler emphasized:
To the extent that crypto intermediaries may one day need to register with both the SEC and the Commodity Futures Trading Commission (CFTC), I would like to point out that we currently have two registrants in the broker-dealer space and the of fund advice.
Meanwhile, the CFTC has asked Congress for authority over the crypto cash market. CFTC Chairman Rostin Behnam explained last week that because the CFTC is a derivatives regulator, it does not currently oversee cash markets. That’s why he asked Congress for “cash authorities so we can get into the bitcoin cash market, the ether cash market, and the other digital commodity brands.” [markets]’ the CFTC chief stated last week.
He also said that because crypto is a new asset class, the SEC and CFTC “need to find out by law.” “Unlike traditional asset classes, this asset class has different components and characteristics,” Behnam said, adding, “We have to look to 70 years of case law to determine what is a security and what is a commodity.”
Who do you think should regulate the crypto market, the SEC or the CFTC? Let us know in the comment section below.
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