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- Gensler blamed the crypto industry’s “broad non-compliance” for the crises it faced.
- In recent months, the SEC has lost in court against both Ripple and Grayscale.
Despite two setbacks in the lawsuits, Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), has not abandoned his position on crypto.
Gensler still believes that crypto assets are securities and should be regulated by the SEC. He blamed the crypto industry’s “broad non-compliance with securities laws” for the crises the sector has faced in recent months.
The SEC chairman compared the situation to that during the economic depression of the 1920s, before the securities laws were enacted.
Gensler will echo the same sentiment at the upcoming hearing before the Senate Banking, Housing and Urban Affairs Committee on September 12, as evidenced by his speech testimony.
Gensler also reiterated that almost all crypto assets pass the Howey test. It is a legal criterion that determines whether an asset or transaction can be considered a security. He said,
Given that most crypto tokens are subject to securities laws, it follows that most crypto intermediaries must also comply with securities laws.
In recent months, the SEC has lost in court against both Ripple [XRP] and grayscale. The SEC had alleged a violation of the federal securities laws in both cases; however, the court ruled differently.
Gensler will also discuss two recent SEC proposals. The first is a proposal on the custody of crypto assets. The second redefines the term exchange to formally integrate crypto platforms.
Bitcoin, Ethereum – what does Gensler think?
The crypto industry will be closely monitoring the Senate committee hearing due to the seriousness of the topics under discussion. It mainly wants to know whether there has been any evolution in the SEC chairman’s views on crypto. However, it appears that Gensler’s views on crypto have only hardened.
Gensler earlier suggested all that except Bitcoin [BTC] is a security. However, he didn’t explain or Ethereum [ETH] is a security or an asset.
Both questions are the point of contention between the SEC and the Commodity Futures Trading Commission (CFTC).
Critics of the regime have criticized the SEC under Gensler for regulatory enforcement in light of ambiguous crypto laws in the US.