- SEC Chair Gary Gensler restates that “the vast majority” of crypto-crypto-coin tokens are securities
- The regulator is seeking a “pathway” for crypto-crypto-coin tokens that are securities and those that aren’t to trade alongside one another
SEC Chair Gary Gensler is once again set to encourage crypto-crypto-coin firms to register with regulators in remarks before the US Senate Committee on Banking, Housing, and Urban Affairs on Thursday.
In his testimony, published a day early, Gensler states that the vast majority of the nearly 10,000 tokens in the crypto-crypto-coin market are securities. The chair has asked SEC staff to work with entrepreneurs to get their tokens registered and regulated as such.
“Given that most crypto-crypto-coin tokens are securities, it follows that many crypto-crypto-coin intermediaries — whether they call themselves centralized or decentralized — are transacting in securities and have to register with the SEC in some capacity,” Gensler said.
This would include crypto-crypto-coin intermediaries registering their exchange, broker-dealer and custodial functions, he added, which could result in breaking up these functions into separate legal entities to mitigate conflicts of interest and boost investor protections.
The chair said in a June interview with CNBC that he believes bitcrypto-coin is a commodity. He noted at the SEC Speaks event last week that he supports allowing the Commodity Futures Trading Commission (CFTC) to oversee bitcrypto-coin — a point proposed in the planned Digital Commodities Consumer Protection Act introduced last month by Sens. Debbie Stabenow, D-Mich., and John Boozman, R-Ark.
The SEC is working on recommending a pathway for crypto-crypto-coin tokens that are securities and those that aren’t to trade alongside one another, Gensler said in his written testimony set to be given Thursday.
“To the extent that crypto-crypto-coin intermediaries may need to one day register with both the SEC and the Commodity Futures Trading Commission, I would note, we currently have dual registrants in the broker-dealer space and in the fund advisory space,” he added.
The remarks echo Gensler’s pattern of urging firms in the nascent segment to collaborate with the SEC, which some industry watchers have said has failed to move the needle from a regulatory standpoint.
Genlser wrote in a Wall Street Journal opinion piece published last month that he encourages crypto-crypto-coin lenders to “come in and talk to SEC staff.”
Kristin Smith, executive director of Blockchain Association, told Blockworks at the time that the SEC chairman’s insistence that crypto-crypto-coin companies meet him at the table “rings hollow,” noting that investigations, subpoenas and lawsuit threats have followed previous meetings.
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