In a recent report, the chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, expressed his opinion on Housing, Banking, and Urban Affairs to the US Senate. However, his controversial testimony has sparked reactions in the crypto community as many crypto enthusiasts welcomed his takes.
Over time, chairman Gensler has not failed to express his stance against the crypto industry, using his position as the apex executive in the commission to raise legal action against numerous entities in the sector like Binance.US, Coinbase, etc., on account of violating securities laws. His multiple anti-crypto takes have spread his reputation as a storm antagonist of crypto firms.
However, his recent positive testimony regarding regulating cryptocurrency assets and the possible endorsement of Bitcoin Spot ETFs has ignited a mixed reaction among the crypto community. Many enthusiasts considered it as a beam of hope emerging from the dark end of the room.
According to the report, the SEC chairman stated that the primary goal of the SEC is to protect investors and implement full compliance with the securities rules in the crypto industry. He added that many crypto tokens fall under the description of an investment contract stated under the securities acts established in the 1930s.
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His statement implies that a significant number of the crypto assets are subjected to securities regulations, requesting third parties like brokers, clearing agencies, and exchanges to comply with the SEC’s rules and regulations by registering or filing for exemptions.
Gensler Remarks On ETFs and Crypto Regulatory Clarity
nonetheless, despite the emphatic negative stance of the SEC on cryptocurrency, the commission still lost its lawsuit against Ripple Labs, a prominent crypto platform, as Judge Analisssa Torres ruled in favor of the crypto firm.
As earlier reported, the regulator had been dragging the court case against the firm, claiming it raised $1.3 billion by illegally selling XRP tokens as unregistered securities. However, the court ruled that the programmatic sale of XRP in 2021 was in no way an investment contract as it failed to meet the criteria of an institutional sale, hence judging that XRP is not a security token.
However, the loss against Ripple Labs did not change the SEC’s opinion that the crypto industry is rife with noncompliance with securities regulations. He emphasized the importance of raising enforcement actions against law defaulters to hold them responsible.
In addition, the commission is actively striving to contribute to the nationwide task of creating a regulatory framework for the rapidly evolving crypto industry. The SEC recently issued a reopening release, suggesting that the existing financial rules be applied to platforms offering crypto-related services and products. the chairman also suggested that the investment adviser custody rule should be updated to cover all cryptocurrencies and improve the security systems of eligible crypto custodians.
SEC Chair Hinted On Positive Outcome Of ETF Applications
Notably, Chairman Gary Gensler’s remarks on Bitcoin Spot Exchange Traded Funds (ETFs) have created a mixed feeling in the cryptocurrency community. He highlighted that multiple Bitcoin ETF applications are currently under review with the commission, including the popular Grayscale Investment application. The positive remark came shortly after a US Federal court challenged the SEC for approving futures Bitcoin ETFs while rejecting Spots Bitcoin ETFs application by Grayscale.
To the crypto community, the positive remark by SEC chairman Gensler is like a silver lining in the sky at this period when there is a heavy clampdown on the crypto industry. His admission on the importance of creating regulatory clarity for crypto and updating the public on the decision of the commission to review the crypto firms’ applications for Bitcoin Spot ETF suggests a possible change in the SEC’s stance.
Even though the firm remains steadfast in upholding its primary goal of protecting investors and ensuring crypto firm compliance with securities rules, Chairman Gensler’s testimony shows the commission may be interested in the crypto innovation and possibly work towards introducing clearer regulations to strike a balance between protecting investors and facilitating inventions in the crypto space.