• Securities and Exchange Commission (SEC) Chair Gary Gensler argued that it is possible for crypto exchanges to register with the SEC.
• The SEC recently brought charges against Coinbase and Binance for operating without registration.
• Gensler also asserted that many cryptocurrencies are securities, pushing back against companies claiming lack of fair notice.
SEC Chair Argues for Crypto Platforms To Register
Securities and Exchange Commission (SEC) Chair Gary Gensler laid into the crypto industry on Thursday, arguing that it is possible for exchanges to register with the agency, despite platforms’ assertions that they tried to do just that. “I disagree with the notion—and recent history disproves it—that crypto intermediary compliance isn’t possible. I do recognize—and, again, think it’s appropriate—that it takes work,” he said in prepared remarks at the Piper Sandler Global Exchange & Fintech Conference.
Lawsuits Against Coinbase and Binance
The SEC recently brought charges against two exchanges — Binance and Coinbase. The SEC said Coinbase was operating its platform without being registered as an exchange broker or clearing agency, and accused Binance and its CEO Changpeng Zhao the day before for multiple offenses such as misleading investors, unlawfully operating as an exchange, among other charges. In its complaint against Binance, the SEC said “while paying lip service to its desire to comply with applicable laws,” Coinbase had been offering trading of investment contracts which are under federal securities laws without registering itself as a broker or clearing agency.
Cryptocurrencies Are Securities
Gensler also again asserted during his speech that many cryptocurrencies are securities: “They are not growing out of the ground like corn or wheat…That they’re digital doesn’t differentiate them from huge swaths of the capital markets.” He went on to say companies claiming lack of fair notice were making a calculated economic decision by taking risks of enforcement as part of their business operations.
Regulatory Clarity Needed
Despite some regulatory clarity in recent years such as when cryptocurrency assets were deemed securities by a 2018 Supreme Court ruling in United States v. Carpenter, ambiguity still exists in this space due largely to the decentralized nature of digital assets and how they fit within existing regulatory frameworks developed over decades ago prior to blockchain technology’s emergence. This has led some industry stakeholders to call on regulators like Gensler to provide more clear guidance on when cryptocurrencies become securities so companies can better understand how they should operate within current legal parameters while continuing innovate in blockchain technology-based applications .
To conclude this article , It is clear from recent events that regulators like Gensler have made significant efforts towards establishing further regulation around crypto platforms following lawsuits against leading exchanges such as Coinbase and Binance . Furthermore , there seems little doubt from Genslers statements about cryptocurrency being considered securities , which will likely prompt stronger enforcement action from agencies such as The Securities and Exchange Commission in order to ensure market integrity .