The US Securities and Exchange Commission (SEC) seems to be out to prove that at least one crypto asset is a security, as stated by Chairman Gary Gensler.
The SEC recently sued two of the biggest exchanges back-to-back, Binance and Coinbase, alleging that both companies failed to register as crypto brokers, exchange, and clearing agencies.
More Digital Currency Unnecessary, Says SEC’s Gary Gensler
In an interview on CNBC’s Squawk on the Street with Jim Cramer, SEC chair Gary Gensler noted that there were over 200 tokens listed on Coinbase as well as Binance but said the Commission wanted to prove that one of them was a security that needed to be registered.
According to the SEC chief:
“All we have to show is that one of them is a security and they should be properly registering and having rule books against fraud and manipulation as an exchange, broker, and the like.”
The SEC chairman previously asserted that all digital assets are securities, except for bitcoin, while stating that projects listing or offering these “security tokens” have to register with the Commission.
Also, Gensler stated that while the public could choose what they wanted to invest in, disclosures have to be in place, or else the investor may not be able to tell if the proposed investment is counterfeiting, a scam, or something else. The SEC chief added that proper disclosures will help the public make informed decisions about their investments.
Gensler also stated that it was unnecessary to have more digital currency, saying that such assets like the U.S. dollar already exists.
“Look, we don’t need more digital currency. We already have digital currency. It’s called the U.S. dollar. It’s called the euro or it’s called the yen, they’re all digital right now. We already have digital investments.”
Gensler Hammers on Compliance
In another interview with Bloomberg, Gensler referred to the lawsuit against Binance and Coinbase as a “straightforward securities case, but it’s in the context of crypto.” The SEC boss also claimed that the crypto firms are mostly designed to be non-compliant with securities laws, adding that exchanges are co-mingling customer funds.
Gensler stressed that the crypto sector could risk collapsing like a house of cards unless the industry “comes into compliance with basic public policy, about disclosure, about avoiding conflict, about properly segregating customer funds, and guarding against fraud manipulation.”
The Commission seemed to have adopted an aggressive approach towards the crypto industry in recent times, bringing enforcement actions against firms alleged to have violated securities laws.
As previously reported by CryptoPotato, the SEC sued two of the industry’s heavyweight cryptocurrency exchanges — Binance and Coinbase — within 24 hours, alleging that both companies violated securities laws.