Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), was recently interviewed by: Yahoo Finance. The interaction shed light on many topics related to crypto and its regulation.
One of the main conclusions from the interview was that crypto companies may be exempt from some securities laws. Gensler hopes the exemption will encourage more cryptocurrency companies to comply with the regulations. He stressed that many companies were operating outside of compliance standards. However, he did not name a company.
Gensler has often stated that many crypto tokens are subject to securities regulations and must be registered as securities. Gensler says Bitcoin and “maybe” Ethereum could be exempt from the securities definition, and he has previously mentioned: Bitcoin a commodity. In addition, any platform that trades these tokens must be registered as an exchange.
In any case, the SEC is considering providing a custom set of regulations for the crypto industry. Considering that stock disclosures might not be the same as those for a crypto token, Gensler argues that it certainly makes sense to change the cryptocurrency stock disclosure regime.
Gensler stated,
“Just as there is a difference between asset-backed securities and an equity offering, there can also be differences here.”
Still, the option to comply may not be a choice anytime soon. Global authorities are taking a more hands-on approach to cryptocurrencies. This is not a surprise as the recent crypto crash has seriously hurt many investors. In addition, large cryptocurrency companies have gone under water because of this.
SEC vs. Ripple lawsuit to set an example for crypto?
While Gensler takes a friendly stance on crypto, the SEC is embroiled in a legal battle with Ripple labs. The lawsuit has been going on since December 2020 and the lawsuit alleges that Ripple Labs raised more than $1.3 billion through illegitimate means.
Anyway, the lawsuit currently revolves around a speech by William Hinman in 2018. In the speech, Hinman stated that Ethereum went from being a security to a non-security, and that was when the SEC didn’t have precise definitions for crypto assets. .
The SEC has done its best to keep the concept of the speech a secret. They applied for attorney-client privilege, but the… court rejected their request. The judge went so far as to call the SEC’s action “hypocrisy.”
The SEC’s unclear definitions regarding crypto assets have caused a lot of confusion. However, the US is rushing for some legislation. Stablecoins are one of the top targets on the agenda and there is a lot of evidence that it will happen sooner or later.