Gary Gensler, Chair of the Securities and Exchange Commission (SEC), is intensifying the regulator’s work on extending regulation over the crypto industry. In his latest testimony at the U.S. Senate, the official declared he has a ‘flexible’ way for tokens to register with the agency, but his previous crypto-skeptical comments indicate crypto industry players could have a different view on the SEC’s approach.
Gensler told the U.S. Committee on Banking, Housing, and Urban Affairs that among “the nearly 10,000 tokens in the crypto market” he believes that “the vast majority are securities.”
“Thus, I’ve asked the SEC staff to work directly with entrepreneurs to get their tokens registered and regulated, where appropriate, as securities. Given the nature of crypto investments, I recognize that it may be appropriate to be flexible in applying existing disclosure requirements,” he said.
Gensler also suggested that the SEC could intensify its cooperation with legacy finance players interested in entering the cryptosphere, potentially increasing institutional adoption.
“I also have asked staff to work with firms that have been operating in other well-regulated markets that want to enter the crypto market. Such traditional financial intermediaries have expressed an interest in providing services to investors in the crypto market and to do so in compliance with time-tested investor protection rules,” he said.
The latest development comes shortly after, earlier this month, Gensler said in a speech that, as, in his view, many crypto tokens are securities, it means that many ‘crypto intermediaries’ are transacting in securities and as a result have to register with the SEC.
“Our fundamental goal is to provide investors with the protections and disclosures they deserve — and that are required by law,” the official said.
In the aftermath of the May 2022 terraUSD (UST) stablecoin crash, the SEC has also launched a series of inquiries into the activities of various crypto exchanges, seeking to determine whether the companies have adequate safeguards in place to prevent insider trading.