The unprecedented boom in the cryptocurrency industry last year had caught the attention of regulators around the world, all of whom showed varying levels of acceptance towards the emerging asset class. The head of the U.S. Securities and Exchange Commission, for example, has repeatedly expressed skepticism about the lack of investor protection and information offered by blockchain projects issuing crypto tokens.
Hardline approach
After a year of hard-lining his stance on the crypto industry, SEC boss Gary Gensler has now issued a fresh disclaimer to crypto projects about the need to register with the regulatory agency. While praising the innovative and entrepreneurial overtones of the indsutry, the top watchdog criticized many of these projects for misleading investors in a recent CNBC interview. He argued,
“Crypto tokens, I’ll call them, raise funds from the public. And do they share with the public the same set of disclosures that help the public decide and comply with the truth in advertising? “
He further added,
“Whether its crypto tokens, whether it’s SPACs, these are something new. What is old and really important is this basic idea that if you raise money from the public and the public is thinking about a profit you have got to give them basic disclosures.”
One of Gensler’s main goals in his short term has been to bring cryptocurrencies to the game of existing securities laws, as he believes most tokens on sale could fall into this category. Stating the same in the interview, he said,
“Unfortunately, way too many of these [projects] are trying to say ‘well, we are not a security, we are just something else.’ I think the facts and circumstances suggest that they are investment contracts, they are securities, and they should register.”
A weakness for ETH?
However, when told about the status of Ether, the second largest token by market cap, the leader declined to comment on “anything in particular,” saying the SEC does “not get involved in public forums. to talk about a single project. “
Notably, prior to coming the SEC top boss, Gensler had told an MIT class he was teaching that ETH could pass as being a security when tested. The point has been raised by many crypto enthusiasts to point out the SEC’s bias in the months since the agency sued XRP issuer Ripple Labs for selling unregistered securities.
Regardless of his previous views on the industry, Gensler cemented his insistence on becoming the primary regulator of virtual assets. In a previous interview with the Wall Street Journal, he insisted that this crypto was part of the “great mandate of the SEC”.
The agency recently also hired a senior adviser specializing in cryptocurrency to provide assistance in “policymaking and interagency work relating to the oversight of crypto assets.”
