According to the law, cryptocurrencies are investment contracts; platforms that offer them need to register with SEC. This was stated by the head of department Gary Gensler.
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
“Intermediaries […] are required to comply with securities laws and register with the Commission. […] Many platforms believe that the investment contracts they added are something else. Regulations set out what it really is, not what you call it.” Gensler pointed out.
The head of the SEC repeated that “the law is clear”, pointing to the howey test.
“An investment contract exists when you invest money in a common venture with a reasonable expectation of a return that will come from the efforts of others. Crypto markets suffer from non-compliance with regulations. It’s not a lack of clarity in regulation. […] The law is clear: if you are a stock exchange, clearer, broker or dealer, you must follow it — register with us” Gensler emphasized.
In the comments under the video, many accused him of inconsistency. They recalled that prior to his appointment as Chairman of the Commission, he had taken a different position.
User RyanSAdams provided a video from 2018, in which, during a lecture in MIT Gensler argued that the SEC had already determined that three-quarters of digital assets were not investment contracts.
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
Earlier, another video of that time was actively discussed in the community, where the current head of the regulator classifies cryptocurrency in the same category as cash and goods, describing digital assets as “non-securities”.
Brian Armstrong, the head of the Coinbase exchange, which was targeted by the department, also reacted to the video with the words “wow”.
The platform’s general counsel, Paul Grewal, actually accused Gensler of hypocrisy.
“We need to be clear. We would like to be able to register, but it’s not just a matter of going to the website and downloading the form as suggested. Since this cannot be done, it would be hypocrisy to suggest otherwise.”— declared He.
The community has already drawn attention to the inconsistency of the position of the SEC under the leadership of Gensler with his previous statements.
During the proceedings against the Bittrex exchange, the regulator equated the native blockchain token Algorand (ALGO) to a security. However, in the course of reading the mentioned course at MIT, Gensler stated that the founder of the crypto project, Silvio Micali, “created a great technology with incredible performance, on which even Uber can be deployed.”
Recall that the leader of the Republican majority in the US House of Representatives Tom Emmer criticized the approach of the chairman of the SEC to the regulation of cryptocurrencies.
Congressman Warren Davidson announced a bill calling for Gensler’s resignation from his post.
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