According to Gary Gensler, the head of the United States Securities and Exchange Commission, made a confirmation that the agency has no authority or intent of banning cryptocurrency.
Gary was responding to questions at the House Committee on Financial Services virtual hearing on Tuesday when he made the emphasis that banning crypto was beyond the mandate of the SEC and said, it would be up to The Congress. Gensler stated:
“It’s a matter of how we get this field within the investor consumer protection that we have and also working with bank regulators and others, how do we ensure that the Treasury Department has it within Anti-Money Laundering, tax compliance. “
He also added that many of the tokens meet the test of being an investment contract, a note or a security, emphasising the need to bring crypto within the investor protection remit of the SEC. Gensler also noted “the financial stability issues that stablecoins could raise” as a priority for the agency.
SEC’s Stance on Digital Assets
Patrick McHenry noticed the actions and stance taken by the SEC pertaining digital assets under Gensler’s leadership during the virtual hearing and accused SEC head of lacking to act in agreement with the agency’s long-held practice of noticing comment on rulemaking and procedures. To this, Gensler responded that the SEC follows the Administrative Procedures Act.
McHenry went ahead to cite comments Gensler made to the Committee in 2019, while teaching at the Massachusetts Institute of Technology where he disapproved of past rulings from the SEC categorizing Bitcoin and Ether as commodities.
Gensler was asked of his views on this matter and said that though he would not get into any one token, the securities laws were very clear in that when one is raising money and the investing public have a reasonable expectation of profit founded on the efforts of others, that fit into the securities law.
The Safe Harbor Proposal
The hearing was held on the same day McHenry suggested the Clarity for Digital Tokens Act of 2021, which is heavily inspired by the safe harbor proposal administered by the pro-crypto SEC Commissioner Hester Peirce in February 2020.
At the same time, McHenry asked Gensler whether he had reviewed Peirce’s Proposal but Gensler dodged answering the question saying,
“Commissioner Peirce and I have talked on her thoughts around a potential safe harbor. I think that the challenge for the American public is that if we don’t oversee this and bring in investor protection, people are going to get hurt.”
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