Benzinga - Securities and Exchange Commission Chair Gary Gensler is preparing to testify on Capitol Hill on Tuesday, and his written remarks ahead of the hearing indicate his unwavering views on crypto.
What Happened: He wrote, “Given this industry’s wide-ranging non-compliance with the securities laws, it’s not surprising that we’ve seen many problems.”
Will Musk Embrace DOGE On X? Ask industry experts directly at Benzinga’s Future of Digital Assets event happening in NYC on Nov. 14, 2023. Be a part of the discussions where you won’t just be a passive spectator. Don’t let this chance slip away – secure early bird discounted tickets now!
Gensler likened the current situation to the 1920s before the implementation of federal securities laws, stating, “It’s reminiscent of what we had in the 1920s before the federal securities laws were put in place.”
The SEC Chair's position on crypto has been clear and consistent, as he expressed that existing securities laws in the US do not need to be revised to accommodate cryptocurrencies. Gensler suggested that “the vast majority of crypto tokens likely meet the investment contract test.”
Regarding the application of the Howey Test to coins like Ethereum (CRYPTO: ETH), Gensler said in an interview with Intelligencer that “everything but Bitcoin” (CRYPTO: BTC) is considered a security.
When questioned about Ethereum’s classification as a security or commodity, Gensler declined to provide a definitive answer during a previous appearance before a House Oversight Committee.
See More: A Stay At The Floating Palace From James Bond's ‘Octopussy
Why It Matters: The distinction between securities and commodities is crucial as it determines the regulatory oversight under either the SEC or the Commodity Futures Trading Commission.
Notably, a New York court ruled against the SEC in a case involving the sale of XRP, stating that certain sales did not constitute the sale of unregistered securities. The SEC also faced another setback in a lawsuit with Grayscale, where a court criticized the agency’s previous denial to convert Grayscale’s $15.6 billion Bitcoin trust into a spot Bitcoin ETF as “capricious.”
Image Courtesy: Flickr
Read Next: Bitcoin, Ethereum, Dogecoin Drop As Beleaguered FTX Looks To Offload Billions In Tokens: Analyst Foresees Extreme Ethereum Crash, Predicts ETH Dropping More Than 70%
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.