In a recent hearing with lawmakers, Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC) said there is no need for additional legislation as the existing securities laws were sufficient to regulate the crypto market.
According to the SEC chair, his agency is enough to oversee regulations in the crypto industry and special legislation for the digital asset class is pointless.
In the March 29 hearing with the House Appropriations Subcommittee on Financial Services and General Government, the SEC chair noted that most cryptocurrencies are securities, and as such companies overseas that sell to investors in the US will have to comply with securities law or face enforcement actions.
Gary’s stance on cryptocurrency has raised many eyebrows over the years with many opposing his views and stance about the industry, the SEC chief recently received backlash from the broader crypto community after a comment that implies that all crypto tokens aside from Bitcoin (BTC) are securities.
However, despite Gary’s comment, the lawmakers are still working on legislation that will make a rival agency the Commodity Futures Trading Commission (CFTC) the main regulator for digital asset commodities.
Many critics insist that Gary’s opinion is not law and that only a judge can decide what assets qualify as a security. Recall that last month, the chamber of digital commerce accused the SEC of going beyond its jurisdiction to forcefully enact laws without going through the right chambers regarding the insider trading case against former Coinbase employees.
SEC Embarks on Enforcement Action
Owing to the failure of major players in the industry in recent times, the SEC has intensified efforts to protect investors against non-compliant entities. Recently the regulator issued a Wells Notice to crypto exchange platform Coinbase for allegedly violating securities law.
In February, the regulator charged Kraken for failing to register its staking program. The exchange later reached an agreement with the SEC to pay $30 million and also end its U.S. crypto staking-as-a-service program. Likewise, Paxos Trust Company faced legal action over its BSUD stablecoin which the regulator alleges is unregistered security.