Sunday, June 16, 2024

How Do Securities Laws Apply to Crypto Tokens, According to SEC Chair Gensler

In a recent interview with CNBC, SEC’s chairman Gary Gensler was discussing the regulatory agenda for 2022 and proposed crypto regulations.

He said that if a firm raises money from the public, investors expect a return on their investment. Hence, he said, it was important to regulate this space. Investors need to have full access to information so that they are protected against fraud.

The growth of crypto assets has thrown open new avenues for investment. The new investment avenues include crypto tokens and special purpose acquisition companies (SPACs). This places additional responsibility on the SEC to protect investors against possible fraud.

It is important for the investing public, that the firms provide them with full information through necessary disclosures so that the public can make an informed investment decision.

Regulations for Crypto

The SEC chairman declined to comment on the increasing use of cryptocurrencies in crowdfunding. Crypto tokens raise money from the general public. In this instance too, SEC’s regulations stipulate that the public be provided with full information to make an informed decision.

He added that the SEC was aware that there were several projects raising money for startup ventures. The SEC was focused on bringing all such efforts under securities laws. There was opposition to this thinking on the grounds that such investments were not securities.

However, the way the SEC viewed the issue every investment contract needs to be treated as a security and be regulated.

He was also asked to specifically comment whether he considered ethereum to be a security. In response, he said that as the chairman of a commission he would not comment or give legal advice on any one particular type of crypto asset.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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