The Securities and Exchange Commission’s Chairman, Gary Gensler, told Congress that the SEC will not ban cryptocurrencies. This is a huge relief, even though Gensler then said “that would be up to Congress.” The SEC Chairman is in the middle of quite the press tour, spreading his opinions on crypto around, clarifying his stance. Those opinions had a lot of people worried, but today Gensler specifically said an outright ban isn’t on the cards.
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SEC Chair: No interest in a crypto ban pic.twitter.com/9a4v4oSig4
— Blockworks (@Blockworks_) October 5, 2021
The SEC Chairman spoke for four hours with the House Committee on Financial Services. At one point, Rep. Ted Budd asked him point-blank:
“But, no bans that you’re interested in implementing via the SEC? As China has done, really, to funnel everyone through their own digital currency”
And Gary Gensler answered:
“No, I mean, that would be up to Congress. What we’re really working with are the authorities that you’ve given us. And I’ve said this, I think that many of these tokens – based on the facts and circumstances – do meet the test of being an investment contract, or a note, or some other form of Security. That we bring them within the investor protection remit of the SEC.”
In short, the SEC is trying to regulate and control. Not to ban.
What Does Gary Gensler Think About Cryptocurrencies?
Let’s not beat around the bush, Gensler thinks that most cryptocurrencies are unregistered securities. And that Cryptocurrency Exchanges should register with the SEC. And that stablecoins are dangerous. However, that’s not really a problem if they’re just trying to regulate the space. If the SEC wanted to ban, it would be a whole different game, but they’re not.
In a recent interview with the Washington Post, Gensler explained his position clearly:
“One of the core issues is that there are platforms: trading platforms where you can buy and sell these tokens; lending platforms, where you can earn a return on these tokens that have not just dozens of tokens but sometimes hundreds or thousands of tokens. And it’s highly likely that they have on these platforms, securities, investment contracts, or notes or others, that fit the definition of security. Those platforms should come in, they should figure out how to register, be an investment–investor protection remit.”
In the same interview, Gensler singled out stablecoins:
“On something called stablecoins, and how the banking agencies–and we, too, market agencies–coordinate because these stablecoins may have attributes of investment contracts, have some attributes like banking products, but the banking authorities right now don’t have the full gamut of what they need.”
ETH price chart for 10/06/2021 on Coinbase | Source: ETH/USD on TradingView.com
The Limitations The SEC Has To Deal With
There are two messages present in all of Gary Gensler’s communications. 1.- Cryptocurrencies fall into his agency’s jurisdiction. 2.- The SEC needs more resources to be able to regulate crypto. That’s the core of his quest. When he says, “what we’re really working with are the authorities that you’ve given us,” this is what Gensler means. He recently came out and just said it:
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“Gary Gensler had told the Senate that his agency was currently operating with less staff than it was five years ago. This has made it impossible for the agency to focus on the things that need its attention. Talking to CNBC, the SEC boss said straightforwardly, “We are short-staffed.”
Even though he might be right about Altcoins being Securities, his endgame is clear. He wants a bigger budget and a bigger stage. And there’s no bigger show than the crypto-circus right now.
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