Cryptocurrency

Crypto community balks at SEC Chair Gensler’s assertion that regulation for capital markets, crypto should be same

Recent Tweets from the SEC Chairman Gary Gensler He clarified his position on the crypto market, stating that digital assets using “different technologies” should be treated the same as any other capital market.

“There is no reason to treat crypto markets differently than other capital markets just because they use different technology.

Crypto Markets Can’t Get Away From Securities Laws

In particular, Gensler It was referring to US securities laws that apply to crypto lending. Using the National Transportation and Motor Vehicle Safety Act of 1966 as an analogy for motorist protection, the SEC chair said the securities laws of the 1930s also protect investors.

“We can drop the idea that cryptocurrency lending is not regulated. On the contrary, the rules have been around for decades. Platforms don’t follow them.”

Gensler picks up on recent market turmoil, with certain CeFi lenders freezing withdrawals or filing for bankruptcy.

Digging into this point, the SEC chair alluded to some crypto platforms circumventing “established investor protections” by relabeling their products or related promised profits. However, citing precedent, Gensler said it was the economic reality of the product, not the product’s label, that determined whether securities laws would apply.

With that, he denounced non-compliant platforms that behave as if they had a choice, even more so those who deliberately choose to ignore the law.

“Rather, it’s like saying these platforms have a choice, or worse, ‘catch us if you can.’

It should be noted that FT In September 2021, Gensler warned cryptocurrency platforms that they face “survival” risks if they ignore existing frameworks. He also said that crypto assets are “no different than any other asset” as far as public policy is concerned.

community reacts

Twitter users took the opportunity to fire back at Gensler.Notable themes to ignore and include indiscreet from a major bank or investment management company knowingly Hinder crypto market.

Several prominent cryptocurrency insiders have also spoken out to move the issue of cryptocurrency regulation forward. For example, founder of the Bankless media outlet, Ryan Adams, asked Gensler if he had ever been involved in the crypto community. So Adams invited him to appear on The Bankless Show.

but, Tony Edwards The Thinking Crypto Podcast duo weren’t too fond of Gensler’s view of treating the cryptocurrency market like any other. Edwards argued that the global token distribution typical of cryptocurrency projects justifies an entirely new approach by regulators.

There is currently a tug-of-war between the SEC and the Commodity Futures Trading Commission (CTFC) over digital asset regulation. Cryptocurrencies that qualify as commodities are proposed to fall under the jurisdiction of the CTFC.

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