We recently reported about how U.S. Securities and Exchange Commission chairman Gary Gensler has made numerous comments concerning increased regulation over various aspects of the cryptocurrency industry. That same theme was part of his prepared remarks to Congress on September 14, 2021.
The Chairman remarked that there was not enough investor protection in crypto finance, issuance, trading, or lending. He said: “[A]t this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications. We can do better.”
The Chairman was careful to note that each token’s legal status depends on its own facts and circumstances, but also remarked that “the probability is quite remote that, with 50, 100, or 1,000 tokens, any given platform has zero securities.” He once again invited crypto trading and lending platforms to “come in and talk to us.” In addition to those platforms, the SEC is looking at the offer and sale of crypto tokens, stablecoins and custody of crypto assets. The Chairman also noted that the SEC was working with the Commodity Futures Trading Commission because the two agencies each have relevant, and in some cases, overlapping jurisdiction in the crypto markets.