- Gary Gensler criticizes the crypto sector for evading the SEC’s registration and disclosure rules, deeming it largely non-compliant.
- SEC pursues legal actions against unregistered crypto exchanges and securities, with Coinbase and Binance under scrutiny.
- Prometheum becomes the first approved crypto broker-dealer, challenging Gensler’s stance on registration; Coinbase seeks regulatory clarity through court.
During a Friday speech focused on the benefits of securities disclosures for the public good, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission, explicitly identified the cryptocurrency sector as a challenging area.
Throughout his leadership, Gensler has been known for his legal actions against what he sees as a predominantly noncompliant sector, arguing that businesses dealing with digital assets are attempting to undermine the SEC’s disclosure rules. These rules mandate the registration of securities and the provision of detailed information to investors about these securities.
There are participants in crypto securities markets that seek to avoid these registration requirements. No registration means no mandatory disclosure. Many would agree that the crypto markets could use a little disinfectant,” Gensler added.
Gary Gensler, U.S. Securities and Exchange Commission Chairman
In his prepared remarks for a Columbia Law School event, Gary Gensler highlighted that some actors within the cryptocurrency securities markets are attempting to circumvent the registration requirements. He emphasized, “No registration means no mandatory disclosure.” Gensler further mentioned that there is a consensus on the need for greater transparency within the crypto markets.
The regulatory body is currently engaging in multiple enforcement actions against firms accused of operating without proper registration as exchanges and offering unregistered securities, including notable entities like Coinbase Inc. and Binance. Additionally, there are reports of an investigation into Ethereum (ETH), with considerations to potentially classify it as a security, a distinction not applied to Bitcoin.
Gary Gensler’s stance that cryptocurrency platforms should undergo registration may soon face a real-world assessment. Prometheum, the inaugural company to navigate the regulatory process successfully and attain approval as a specialized crypto broker-dealer, is preparing to launch its services to consumers, according to its executives. Concurrently, Coinbase is seeking intervention from an appeals court to compel the SEC to initiate rulemaking specifically tailored to the cryptocurrency sector.
