In recent news, Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC), strengthens his stance on cryptocurrency oversight irrespective of legal setbacks, planning to restate his position to lawmakers on September 12.
Despite experiencing legal blows over the last two months by failing in cases against Grayscale and Ripple, Gensler remained resolute, firm in the belief that his agency should maintain domain over the crypto industry. His prepared testimony for the Senate Banking Committee is set to reinforce the view that cryptocurrency assets qualify as securities, therefore falling under the monitoring of his agency.
Gensler’s determination remains steadfast as the failure of crypto firms to comply with securities laws has resulted in industry-wide issues. This pattern is a throwback to the 1920s situations before the implementation of federal securities laws. Gensler emphasizes that most crypto assets comply with the Howey test, a legal test executed to determine if an asset qualifies as a security. With a majority of crypto tokens subject to securities laws, it implies that crypto intermediaries must adhere to these laws as well.
However, in a significant blow to the SEC, Judge Analisa Torres supported Ripple partially in July. In her ruling, Judge Torres disclosed that the sales of XRP tokens to retail consumers didn’t transgress federal securities laws. LBRY, a blockchain-based payments network found guilty of violating securities laws, too, was inspired to launch an appeal against the SEC’s ruling.
As Gensler charts ahead, prepared to testify on Capitol Hill, his hardline opinions on cryptocurrency have not fizzled out. His comments on cryptocurrency regulations will be keenly observed amid widespread industry call for regulatory clarity in the U.S.
Gensler’s stand on crypto has been unwavering and explicit. He asserted that no change to existing U.S. securities laws is required to accommodate crypto, suggesting that a vast majority of crypto tokens likely pass the investment contract test. This standpoint involves the Howey Test, the agency’s four-factor methodology for determining if an offering qualifies as a security.
Though Gensler’s assertion stirs debate and criticism, it highlights a regulatory struggle. Both political sides share the sentiment that a regulatory regime constructed via enforcement actions does not assist investors or issuers in the context of crypto. Gary Gensler’s unwavering stand on crypto regulations, despite legal setbacks and industry criticism, signals a resilience that thrives in the face of uncertainty and adversity.