SEC chair Gensler claps back at Coinbase, says crypto rules already exist

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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has hit back at Coinbase’s petition asking the agency to take a clear stance on cryptocurrency regulation, arguing that proper legislation is already in place. bottom.

In the keynote address on May 15th speech At a financial markets conference, Gensler was asked about his dispute with Coinbase, the rules around cryptocurrencies, and why “the SEC doesn’t publish the rules of its markets.”

In response, Gensler was adamant that “the rules have already been published”, adding:

“To put it very directly, this is an area that has largely operated out of compliance. […] Nothing about new technology is inconsistent with the public policies enacted by Congress. ”

Gensler argued that the SEC has already issued rules regarding the conditions required for custody of assets, requirements for becoming an exchange, broker-dealer and advisor, and how to register securities offerings with the agency.

Gary Gensler speaking at a financial markets conference. Source: Youtube

The SEC chairman’s current view is that most crypto assets, with the exception of Bitcoin (BTC), fall under the definition of securities in investment contracts.

“In ordinary business, if the public invests money and expects profits based on the efforts of others, that is security,” he said, adding:

“There are financial intermediaries and nodes in the network, and they must be compliant if they have securities on the platform.”

Coinbase (and many other U.S. crypto companies), along with their apparent lack of crypto regulation and hostile nature when dealing with digital asset companies, have taken the SEC’s so-called “regulation by enforcement” approach to crypto. has repeatedly voiced opposition to

The company went so far as to file a lawsuit in federal court in April to compel the SEC to publish its position on a July 2022 petition calling for clearer rules for the cryptocurrency sector.

Notably, the U.S. Chamber of Commerce also echoed Coinbase’s call, harshly criticizing SEC oversight in its May 9 court brief.

“The SEC has deliberately confused things by deploying an ad hoc, law-enforcement-based approach while claiming sweeping powers over digital assets,” it said.

Related SEC Under Fire Over Custody Rules: Law Decryption, May 8-15

On May 8, Coinbase Chief Legal Officer Paul Grewal also sent a letter to the SEC, requesting amendments to the proposed update to the Registered Investment Advisor custody rule.

Fundamentally, Coinbase says the proposal unfairly targets cryptocurrency companies, lacks nuanced rules for different asset classes, and makes inappropriate assumptions about securities-based custody practices. claimed.

Other players in the field, including Andreessen Horowitz (a16z) of Web3 venture capital fund and the Blockchain Association, have made similar criticisms of the proposal.

magazine: Cryptocurrency Regulation — Does SEC Chairman Gary Gensler Have the Final Decision?