Gary Gensler, the chief of the US Securities and Exchange Commission, has confirmed that his agency has no power or intention to ban cryptocurrencies.
Answering questions during a hearing of the House Financial Services Committee on October 5, Gensler stressed that the ban on crypto was not under the mandate of the SEC, stating, “That would be a matter for Congress.”
“It’s about how we include this field in the investor-consumer protection that we have, and also work with banking regulators and others – how we make sure the Treasury Department includes it in the fight against money laundering and tax compliance,” said Gensler .
“Many of these tokens pass the test of being an investment contract, note or security,” he added, emphasizing the need to put crypto “in the SEC’s investor protection mandate.”
Gensler also noted that “the financial stability issues that stablecoins may pose” are a priority for the agency.
Representative Patrick McHenry targeted the SEC’s actions and stance on digital assets under Gensler’s leadership during the hearing and accused the SEC chief of failing to comply with the agency’s “long history of observing comments on rules and procedures.” Act.
“Some of your comments have raised questions in the marketplace and made things less than clear. You have made seemingly spontaneous remarks that move the markets, you have disregarded the establishment of rules by posting a statement without due process, and you have essentially been rude to American investors. “
Gensler responded that the SEC follows the Administrative Procedure Act.
McHenry also cited comments Gensler made to the committee while teaching at MIT in 2019 criticizing previous SEC decisions classifying Bitcoin and Ether as commodities.
When asked about his current views on the matter, Gensler said, “I’m not going to get involved in any token, but I think the securities laws are pretty clear – when you’re collecting money.” […] and the investing audience […] have a reasonable expectation of profits based on the efforts of others that fits into the Securities Act. “
Related: US lawmakers propose a safe haven for digital tokens in a new law
The hearing took place on the same day that McHenry received the Clarity for the Digital Token Act of 2021, which relies heavily on the Safe Harbor proposal put forward by pro-crypto SEC Commissioner Hester Peirce in February 2020.
During the hearing, McHenry urged Gensler to take the time to consider Peirce’s proposal. While Gensler evaded answering whether he had specifically checked Peirce’s suggestion:
“Commissioner Peirce and I have shared your thoughts on a possible safe haven. I think the challenge for the American public is that if we don’t monitor this and put in place investor protection, people will be hurt. “