The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has explained how securities laws apply to cryptocurrency tokens as he outlined the commission’s priorities in regulating the crypto space. “Our role at the SEC is to ensure that the public still gets basic protection,” he stressed.
SEC Chair Gary Gensler on Cryptocurrency Regulation
SEC Chair Gary Gensler discussed cryptocurrency regulation and the agency’s 2022 regulatory agenda on CNBC Monday.
The chairman explained that, in general, “If you are raising money from the public, and the public is in anticipation of profit based upon that promoter, sponsor, that group’s efforts — that’s within the securities laws, and it’s within the securities laws because Congress painted with a broad brush.” He elaborated:
They want to protect you — the investing public — so that you have proper information, or what’s called full and fair information, and protect you against fraud and scammers and the like.
Gensler stressed that investments that call themselves a token “are still probably, possibly a security.”
While acknowledging that new ways to invest, including crypto tokens and Special Purpose Acquisition Companies (SPACs), are “exciting,” the SEC chairman emphasized:
Our role at the SEC is to ensure that the public still gets basic protection.
Gensler further explained: “What is kind of 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 and everything.”
He was also asked to comment about the increase in crowdfunding using cryptocurrencies. Reiterating that he will not comment on any particular project, the chairman detailed: “Crypto tokens, I will call them, are raising money from the public, and are they sharing with the public the same set of disclosures that helps the public decide and are they complying with our Truth in Advertising? Call it the Securities Act’s anti-fraud provisions.”