JAKARTA In the midst of unclear rules regarding whether cryptocurrencies are categorized as securities or commodities, US Securities and Exchange Commission chairman Gary Gensler urged various crypto industries to register his projects with the regulator. Gensler argues that most cryptocurrencies are securities.
The SEC chairman made the statement in a speech at an event held by the Practising Law Institute. Furthermore, he considered that crypto investors who buy crypto assets that fall into the securities category must receive protection from the authorities.
Investors are entitled to disclosures to help them sort between investments they think will thrive and which they think will fail, Gensler said, quoted by Yahoo Finance.
"Decent investors are protected from fraud and manipulation," he added.
Descripting the SEC founder Joseph Kennedy's statement, Gensler said the rules set out in a nearly 90-year-old securities law should apply to cryptocurrencies.
"For generations, Congress has perfected and amended this main law, adding, among other things, the supervision of clustering agencies and the free-selling securities market," Gensler said.
Gensler also said on Thursday that the so-called Howey Test remains a standard according to him, most of the quality crypto tokens are investment contracts.
Recently, members of Congress have revived concerns about fraud in the crypto market. On August 30, the House's subcommittee on Economic Policy and Consumers sent a letter to the SEC, three other Federal regulators, and five crypto exchanges seeking information on how each combats cryptocurrency-related fraud and fraud.
Three days later, Coinbase Global (COIN), the only public company to receive such a letter, said in a blog post of thousands of crypto tokens reviewed about 90% has never been considered to be listed for not meeting our strict terms of protection against fraud such as pump-and-dumps and rug pull.
Along with broker services and dealers, Gensler said the loan of crypto security tokens was also below the same regime requirements.
Even for businesses dealing with non-sekuriti crypto like bitcoin, which will be under the jurisdiction of the Commodity and Futures Trading Commission (CFTC), Gensler says a larger authority to monitor and regulate is required.
As far as crypto intermediaries may need to register with the SEC and CFTC, I would note that currently we have double registrants in the broker-dealer space and in the advisory room of the fund, Gensler said.
The SEC securities law is nearly a century old. Regarding whether the regulation will be refined or passed, it all depends on the decision of the US Congress. However, it is not yet known whether the 90-year-old law and is still being used by the SEC can be applied to new assets called cryptocurrencies or not.
This confuses the crypto industry, because old rules are used to assess very new assets. Plus, with no clear standards and criteria on what the crypto industry can follow and cannot follow. The SEC also did not explain clearly to the crypto community why certain crypto projects fall into commodity or securities categories such as Bitcoin, Ethereum, and XRP.
The SEC vs Ripple case itself took quite a long time, starting in December 2020 and has not been completed so far. On the other hand, a few weeks ago, the crypto community demanded Gensler resign from office. The claim was submitted by the community through a petition on Change.org.
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