SEC Chairman Gary Gensler said the agency will not ban cryptocurrency, yet another indication that it will soon be coming to a retirement plan near you.
In hearing before the House Committee on Financial Services on Tuesday, Gensler instead said any ban would be up to Congress.
In opening remarks, he said, “large parts of the field of crypto are sitting astride of — not operating within — regulatory frameworks that protect investors and consumers, guard against illicit activity, and ensure for financial stability.”
Calling it the Wild West or the old world of “buyer beware,” there isn’t enough investor protection in crypto finance, issuance, trading, or lending, and it’s an asset class rife with fraud and scams, and abuse in certain applications.
He said he’d asked SEC staff and fellow regulators to work along two tracks:
- One, how can the SEC work with other financial regulators under current authorities to best bring investor protection to these markets?
- Two, what gaps are there that, with Congress’s assistance, the SEC might fill?
“With respect to investor protection, we’re working with our sibling agency, the CFTC, as our two agencies each have relevant, and in some cases, overlapping jurisdiction in the crypto markets,” he added. “With respect to a broader set of policy frameworks, we’re working with not only the CFTC, but also with the Federal Reserve, Department of Treasury, Office of the Comptroller of the Currency, and other members of the President’s Working Group on Financial Markets, on these matters.”
Further, he suggested that platforms and projects come in and talk, noting that many platforms have dozens or hundreds of tokens. While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that any given platform has zero securities with 50, 100, or 1,000 tokens.
“Make no mistake: To the extent that there are securities on these trading platforms, under our laws, they have to register with the Commission unless they qualify for an exemption,” Gensler emphasized.
Claiming he’s technology-neutral, he concluded that crypto technology has been and can continue to be a catalyst for change, “but technologies don’t last long if they stay outside of the regulatory framework. I believe that the SEC, working with the CFTC and others can stand up more robust oversight and investor protection around the field of crypto finance.”