At the 2023 Securities Enforcement Forum, SEC Chairman Gary Gensler stated that the cryptocurrency industry is not aligned with U.S. regulations. In the event, he reiterated concerns that the cryptocurrency industry continues to suffer from noncompliance with US rules.
In his speech at the Securities Enforcement Forum, Gensler noted his concerns about the decentralized nature of the crypto industry, and stressed that it is not exempt from financial regulations.
Gensler cited the history of securities laws and Congress’s definition of a security, which includes the term “investment contract.
The SEC boss stated that Congress implements security laws is the sole purpose to regulate investment. Gensler reiterated that investors and issuers in crypto asset securities markets deserve the same level of protection as those in traditional finance.
Pointing to the economic realities of the crypto industry, Gensler referred to the Howey decision, suggesting that most crypto assets meet the definition of an “investment contract” and are therefore subject to securities laws.
Gensler directly addressed the industry’s problems, likening it to the pre-regulation era of the 1920s and highlighting issues like fraud, scams, bankruptcies, and money laundering. Gensler drew parallels between this era and the current state of crypto markets, suggesting that the lack of regulation is leading to similar problems.
Gensler stressed that the SEC is committed to protecting investors and the public from crypto scams. He said the key to the industry’s success is accountability, and that the SEC will continue to use all available tools to hold bad actors accountable.
Former SEC Chair Jay Clayton is optimistic about the future of crypto, suggesting that a Bitcoin ETF is inevitable.
He shared his views in an interview on CNBC’s “Last Call.” Clayton credited the resolution of regulatory concerns for his optimism, noting that a Bitwise report had identified issues like wash trading and data quality.
While these issues were previously roadblocks to ETF approval, they have since been addressed to the satisfaction of regulators and sophisticated parties. This, according to Clayton, bodes well for the future of a Bitcoin ETF.
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