The chairman of the U.S. Securities and Exchange Commission has again taken aim at the crypto industry, claiming that many crypto platforms are in violation of securities laws.
In an April 27 tweet, Securities and Exchange Commission (SEC) Chairman Gary Gensler shared a four-minute video of himself referring to crypto assets as “investment contracts” before calling on platforms offering such products to register with the SEC to protect American investors.
“An investment contract is when you invest money in a common enterprise with a reasonable expectation of profits derived from the efforts of others,” he said.
Intermediaries for investment contracts are required to comply with securities laws & register with @SECGov.
Instead, many crypto platforms are contending that their investment contracts are something else.
The law cares about what something actually is, not what you call it.
— Gary Gensler (@GaryGensler) April 27, 2023
“Crypto markets are suffering from a lack of regulatory compliance. It’s not a lack of regulatory clarity. […] The law is clear: If you’re a securities exchange, a clearinghouse, a broker or a dealer, you have to comply and register with us,” Gensler continued.
The SEC has been at the forefront of cracking down on cryptocurrencies in the U.S., with Gensler repeatedly emphasizing that essentially all cryptocurrencies – with the exception of Bitcoin (BTC) – fall under the classification of securities.
Gensler believes that many crypto companies and platforms violate securities laws if they are not registered with the SEC.
In the comments on Gensler’s recent video, many pointed out that before Gensler took the helm at the SEC, he had a completely contradictory view of the crypto market.
weird cause a guy told me three quarters of this space has already been determined by the securities and exchange commission not to be a security pic.twitter.com/0YsRcae3St
— RYAN SΞAN ALTCOIN – rsa.eth (@RyanSAdams) April 27, 2023
Last week, a viral video circulated on crypto Twitter in which Gensler can be seen lumping cryptocurrencies into the same category as cash and commodities, calling digital assets “non-securities.”
The SEC chairman’s comments come from a “Blockchain and Money” lecture in 2018, when Gensler was a professor at the Massachusetts Institute of Technology (MIT).
“Three-quarters of the market is non-securities, it’s just a commodity, cash, crypto,” Gensler said at the time.
Another one – The below clip is from a Fall 2018 Graduate MIT course called “Blockchain and Money.”
Gary Gensler – the current President of the SEC, was the professor.
Once again, I will let the below video speak for itself.
Lecture 8: Public Policy – October 1, 2018
— zk- (@ZK_shark) April 27, 2023
Earlier this month, Gensler was grilled by members of Congress during an April 18 hearing where there was much criticism of his leadership and the SEC’s approach to regulating cryptocurrencies, which appears to be regulation by enforcement.
During the hearing, Gensler refused to officially confirm whether or not he believes Ether (ETH) is a security.