U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said that rules for token issuers and cryptocurrency exchanges already exist, but they are fundamentally unwilling to comply.
While speaking at a Federal Reserve Bank of Atlanta conference, Gary Gensler was asked why the regulator refuses to publish rules for the cryptocurrency market.
Gensler responded that these rules have been around for a long time:
the SEC has developed regulatory requirements for exchanges, broker-dealers, consultants and asset custody companies, and how to register an offering of securities.
According to Gensler, there is nothing in the latest technology that would make it incompatible with these rules.
Gensler explained that if the public invests money and expects to make a profit based on the efforts of others, we are talking about securities and investment contracts.
The SEC chairman was also asked if he thought the agency was lagging behind in rulemaking on cryptocurrencies.
Gensler responded that the regulator has already initiated about 140 court cases, including 60 proceedings under his leadership.
In addition, Gensler refuted the claim of decentralization of the cryptocurrency industry.
“The crypto industry tends to centralize.. Take any token, for example, you can find its creators on a website, Reddit, or Twitter,” said Gensler.
He added that the SEC is ready to help cryptocurrency issuers and virtual asset service providers (VASPs) ensure their compliance.
However, as Gensler puts it, the problem is that their business models are built on non-compliance. Registration with the SEC implies full and accurate disclosure, which will solve possible conflicts of interest.
“It’s not like we allow the NYSE to issue its own token, raise money with it, use leverage with it or offer loans,” Gensler gave an example.
As for artificial intelligence, the SEC chairman believes that AI also poses risks to financial stability.
A crisis in 2027 or 2032 could involve people relying on the same AI-based financial data aggregators, and that could lead to disastrous results.
Recall that SEC Commissioner Hester Peirce recently suggested that U.S. regulators rely on the recently passed European Union’s Cryptocurrency Regulation Act (MiCA).
In her view, this will bring clarity to the oversight of cryptocurrencies.