The US Securities and Exchange Commission (SEC) chair Gary Gensler said existing regulations are enough to address the crypto market as most cryptos are securities and fall under SEC jurisdiction.
Gary Gensler testified at the House Appropriations Subcommittee on Financial Services and General Government on Wednesday, March 28th. He iterated his stance on the securities status of most crypto assets and said that existing securities laws cover most of the activity happening in crypto market.
SEC is Stretched Thin to Address Crypto Issue
First, Congressman Mark Pocan asked the SEC boss whether the agency had adequate resources with the current budget to address the crypto issue. Gensler answered that the SEC is currently “stretched thin” when it comes to investigating emerging crypto markets.
In his testimony to the subcommittee, Gensler called the crypto market as a wild west “rife with non-compliance.” In the SEC’s budget request hearing for FY 2024, he called for more resources to address the risks in crypto markets. According to him:
“Meanwhile, rapid technological innovation in the financial markets has led to misconduct in emerging and new areas, not least in the crypto space. Addressing this requires new tools, expertise, and resources.”
Congressman Sanford Bishop inquired the chairman about the role of the SEC in crypto regulations and whether the SEC had plans to issue a rule clarifying how securities law applies to digital assets.
According to him, the majority of crypto coins and tokens, except Bitcoin (BTC), fall under the definition of securities. He said:
“Frankly, of the ten or twelve thousand tokens, there are very few that don’t have a group of entrepreneurs in the middle that the public is counting on. Those are securities under the securities law.”
When it came to regulation specifics, Gensler argued that regulations were already in place. “The regulations actually already exist, sir. They’re called the securities regulation, and so there are disclosure regulations for when somebody tries to raise money from the public,” he replied.
After the hearing, he told reporters that additional legislation is unnecessary for crypto. However, if Congress acts, it should not undermine the existing laws.
US legislators are currently working on a bipartisan crypto bill that will be released in mid-April.
Meanwhile, US regulatory agencies are rampaging the US crypto industry. The SEC has recently taken regulatory actions against many prominent crypto companies.
Last month, it fined crypto exchange Kraken $30 million for violating securities laws. Also, it recently issued a Wells notice to Coinbase alleging that its staking products constitute unregistered securities.
