SEC Won't Ban Crypto But Congress Can, Says US Securities And Exchange Commission Chairman Gary Gensler

JAKARTA – Recently, the chairman of the US Securities and Exchange Commission (SEC) Gary Gensler said that his party would not block or ban cryptocurrencies. However, Gensler said the party that could ban crypto was congress.

Gensler said he had neither the authority nor the plan to ban cryptocurrencies. As is known, currently cryptocurrencies are loved by the global community. Gensler made the statement at a joint session of the House Committee on Financial Services on October 5 yesterday.

According to Cointelegraph, SEC chairman Gary Gensler explained that banning cryptocurrencies does not fall within the SEC's mandate and stated that "it's up to Congress."

"It's a matter of how we put this area in our investor consumer protection and also work with bank regulators and others — how we make sure that the Treasury has it (protection) in anti-money laundering, tax compliance," said Gensler.

“Many of these tokens are taking the test as investment contracts, or notes, or security,” Gensler added.

He also stressed the importance of bringing cryptocurrencies “within the investor protection powers of the SEC.” Gensler also emphasized “financial stability issues that stablecoins can raise” as a priority for the agency.

In addition, congressional representative Patrick McHenry criticized the steps taken by the SEC under Gensler's leadership. McHenry said the SEC chief failed to follow the rules of "the agency's long-held practice of paying attention to comments regarding rulemaking and procedures."

“Some of the comments you have made have raised questions in the market and made things less clear. You've made seemingly nonsensical statements that move the market, you've ignored rule-making by issuing statements without due process, and you've basically acted harshly on American investors," McHenry said.

Responding to the scathing criticism, Gensler stated that his party had followed administrative procedures. In addition, McHenry also cited Gensler's comments to the Committee two years ago when the SEC chairman taught a crypto and blockchain class at MIT. At that time he criticized the SEC's decision to include Bitcoin and Ether as commodities.

When asked about Gensler's current views on the matter, the SEC chairman replied: “I don't side with any token, but I think the securities laws are pretty clear – if you raise money [...] and public investments [. ..] has a reasonable expectation of profit based on the efforts of others, that is in accordance with securities laws.”

The hearing took place when McHenry proposed the Clarity for Digital Tokens Act of 2021, which referred to a proposal submitted by pro-crypto SEC Commissioner Hester Peirce in February 2020.

During the trial, Gensler came under pressure from McHenry and asked whether Gensler had time to review Peirce's proposal. SEC Chairman Gary Gensler responded to the question by stating that he and Peirce had discussed the matter.

Gensler said the challenge now is "if we don't monitor this (crypto) and provide protection to investors, society will suffer."