Gary Gensler: “Securities trading cryptocurrency exchanges must register with the SEC”

The SEC chairman warned that cryptocurrency exchanges listing cryptoassets that are securities must register with the regulator.

US Securities and Exchange Commission (SEC) Chairman Gary Gensler made a statement during a meeting of the US Senate Banking Committee. He said the SEC, like other federal regulators, does not have direct oversight of cryptocurrency exchanges.

“They haven’t registered with us yet, although dozens of crypto assets are traded on these platforms, which could be securities,” Gensler said.

In comments prepared for the committee, published on Monday, Gensler wrote that any cryptocurrency exchange that has securities listed must register with the SEC. In the document, he did not point to specific companies. During the hearing, Massachusetts Senator Elizabeth Warren, an outspoken critic of cryptocurrencies, used Coinbase as an example when answering the question of whether cryptocurrency is really driving financial services accessibility.

“Let’s say last Monday I pulled out the last part of my savings, went to the Coinbase cryptocurrency exchange and bought $ 100 worth of ether. Early Tuesday morning, I woke up and saw that the market was on the verge of falling, and decided to sell the cryptocurrency right now. But when I tried to do it, Coinbase was down due to technical issues, ”Warren said.

In a recent statement, Gensler expanded on his previous proposals to strengthen regulatory oversight of cryptocurrency markets by asking for more resources to regulate various projects. Senator Catherine Cortez Masto asked if the SEC has enough staff to regulate cryptocurrencies. Gensler said Congress could help coordinate oversight among banking regulators as well as oversight of stablecoins.

“I think that in terms of funding, we could employ a lot more people. I must be frank with you – there are over 6,000 projects on the market. And while some of them are commodities, many of them are securities in accordance with the law, ”he said.

Pat Toomey, one of the senators who pushed for amendments to the infrastructure bill to narrow the definition of “cryptocurrency broker” in the tax regulation, reminded Gensler of the lack of clear guidance as to which cryptocurrency is considered a security under federal law. …

“The really important question is whether a cryptocurrency is a security for regulatory purposes according to the Howie test or other tests. Based on your public statements, you believe that some cryptoassets are securities and others are not. Therefore, I am disappointed that there is no helpful guidance from the SEC explaining how you make this distinction. What makes some of them securities and others not securities? Toomey asked in his opening remarks.

Gensler said that “a small number” of cryptocurrencies do not constitute securities, but in his opinion, many fall under this definition. Toomey raised the issue again during the hearing, citing stablecoins as one example, and noted that the lack of clear direction from the Securities and Exchange Commission is a major problem.

“When I look at these benchmarks for securities, it seems to me that stablecoins don’t fit that definition,” he said. “Maybe I’m wrong. But, if I can misinterpret this, then others can too, and public guidance can be helpful in bringing clarity. ”