SEC Chairman Gensler Applauds Coinbase, Says Crypto Rules Already Exist

Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), has turned down Coinbase’s petition to compel the agency to provide a clearer stance on crypto regulation, arguing that there are already enough laws in place.

May 15 keynote speaker speech At the Financial Markets Conference, Gensler was asked about the dispute with Coinbase, regulations on crypto and “why the SEC doesn’t publish the regulations for that market”.

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

“To make it quite direct: This is an area operating largely non-compliant. (…) There is nothing about a new technology that makes it compatible with public policies laid down by Congress. makes it inconsistent.

Gensler argued that the SEC has already created rules for how to keep assets in custody, be an exchange, broker dealer or advisor, and how to register securities offerings with the agency.

The current view of the SEC chairman is that most crypto assets – apart from bitcoin (BTC) – fall under the securities definition of an investment contract.

“If the public is investing money and anticipating profit based on the efforts of others in a common enterprise, then it is a security,” he said.

“The financial intermediaries in the network are the nodes, and they need to come into compliance if they have securities on their platform.”

Coinbase – and many other US crypto firms – have repeatedly spoken out against the apparent lack of clear crypto regulation and the SEC’s so-called “regulation by enforcement” approach to crypto, as well as its hostile nature when dealing with digital asset firms. .

this afternoon, i will join @AtlantaFedof 2023 Financial Markets Conference.

My remarks will be livestreamed at 12:45 PM: https://t.co/T01c8zAD8c#FedFMC https://t.co/igDs9w8F1y

— Gary Gensler (@GaryGensler) May 15, 2023

In April, the firm filed an action in federal court seeking to compel the SEC to publicly reveal its stance by July 2022 on a petition that called for clearer regulations for the crypto sector. .

Notably, the US Chamber of Commerce has also echoed this call of Coinbase as it heavily criticized the SEC’s oversight through a May 9 amicus brief.

“The SEC has intentionally muddied the waters by claiming broad rights over digital assets while applying an haphazard, enforcement-based approach,” it said.

Connected SEC Under Fire for Its Custody Rule: The Law Decoded, May 8-15

On May 8, Coinbase Chief Legal Officer Paul Grewal also sent a letter to the SEC requesting amendments to the agency’s proposed update to its Registered Investment Advisor Custody Rule.

Essentially, Coinbase argued that the proposals unfairly target crypto companies, provide a lack of nuanced regulations for different asset classes and make unfair assumptions about securities-based custodial practices.

Other players in the space such as Web3 venture capital fund Andreessen Horowitz (a16z) and the Blockchain Association have also voiced similar criticism of the proposals.

magazine: Crypto Regulation – Does SEC Chairman Gary Gensler Have the Final Say?