Crypto exchanges should come in and register, or we are going to continue to bring in our enforcement and examination functions, warned Securities and Exchange Commission chair Gary Gensler. He made this statement at a congressional subcommittee on Wednesday.
This was Gensler’s response to Rep. Steve Womack, who is displeased with the SEC’s failure to create an explicit set of regulations for cryptocurrencies. Womack drew an example from football, saying that before an official can throw a flag, he or she has to know the rules.
The Securities and Exchange Commission, to date, has brought more than 80 enforcement actions against crypto asset offerings and platforms. Gensler highlighted that such actions were well within the regulator’s purview. He said the rules are clear if a firm is raising money from the public, and the public is looking for profit – then that’s a security.
But its not so simple as SEC has not clarified which crypto assets it has classified as securities and which as commodities. Surprisingly, Gensler referred to Bitcoin as a commodity. Time and again, crypto firms and companies have highlighted the “blurred lines” posed by cryptocurrencies and crypto-assets. The firms have expressed confusion and frustration about SEC’s poorly articulated laws. Last month, Gensler said he wanted to create a novel registration and regulation process for crypto. It would be supervised by both, the SEC and the Commodities Future Trading Commission (CFTC). Both agencies will monitor the crypto securities and crypto commodities.
In regards to SEC’s budget for 2023, Gensler said more resources were needed to adequately regulate crypto. The agency announced earlier this month that it was expanding the newly rebranded Crypto Assets and Cyber Unit to over 50 personnel. The SEC will use additional resources to protect crypto consumers from unprecedented risks.