The head of the U.S. SEC, Gary Gensler, will go down in history as a fierce critic of the crypto industry. He recently justified his personal view to the U.S. Senate that regulating the sector is essential. Since the creation of the Securities and Exchange Commission (SEC) in 1929, the world has fundamentally changed in the securities markets.
In particular, the emergence of cryptocurrencies poses challenges for the SEC, as securities laws are only partially applicable here.
Gensler once again stated his opinion to the Senate Banking Committee that many cryptocurrencies should be under the supervision of the US Securities and Exchange Commission. In his statement, he emphasized that there is "nothing in the securities markets for crypto-assets that suggests that investors and issuers are less deserving of the protections of our securities laws."
Furthermore, Gensler stated that a "long list of over 30 points" was included in the definition of a security in 1933 and 1934. According to Gensler, "the vast majority of crypto tokens probably meet the investment contract test".
He countered the widespread view of industry representatives that cryptocurrencies did not fall under the jurisdiction of the SEC, arguing that investors and issuers deserved the protection of his agency.
To reinforce his position, he referred to the ongoing court conflict between the SEC and Ripple. Ripple co-founder and CEO Brad Garlinghouse and co-founder Chris Larsen had distributed several billion of the cryptocurrency Ripple on the market.
These overlooked sales without adequate supervision, allegations of price manipulation, and high financial volume claims are key issues here.
In the further course, Gensler put forth his belief that the SEC should be the force overseeing the growth field of the crypto industry. With regard to the non-compliance with laws in the sector, he said it was not surprising that they "have seen many problems" reminiscent of the "1920s."
Following these assessments, the authority, in his opinion, has the duty to "hold wrongdoers accountable and promote investor protection" - even if he does not go into detail about specific tokens.
In summary, it can be said that Gary Gensler is pushing for regulation of the crypto industry to provide the greatest possible protection for investors. Nonetheless, it remains to be seen whether he can assert his position in the legal dispute between the SEC and Ripple. Only then would a precedent be set.
