The president of the US Securities and Exchange Commission (SEC), Gary Gensler, recently gave in a interview with New York Magazine indicates that he believes that all cryptocurrencies should be seen as securities, or effects. This would have serious implications for the crypto market, as securities regulations in the United States are very strict. Gensler’s statements, however, were not appreciated. He received a huge amount of criticism.
Are crypto securities?
It has been a question for years that hangs over the crypto market like a dark cloud. Are cryptocurrencies whether or not to be labeled as securities? A concrete answer to this question does not yet exist. This should be determined by law, by a court decision or by the government.
It is also the key question that applies to the famous lawsuit between Ripple (XRP) and the SEC. According to the SEC, Ripple was guilty of selling XRP tokens as security, without having licenses for this. But is XRP really a security?
So Gary Gensler seems to be of the clear opinion that all cryptocurrencies, with the exception of bitcoin (BTC), should be seen as security. That would be a major blow to the entire industry as a whole.
Criticism of the SEC
But as critics have made clear, it is not at all for Gensler to make that decision. The SEC does not have the authority to label certain assets as ‘security’. Again, this must be done by a judge or it must be stipulated in a new law.
That is also why a legion of crypto lawyers have now opened fire on Gensler. According to many, he would go beyond the limits imposed on him by law. The SEC should serve as an enforcer of the law, not as a legislator the criticism often.
“Chairman Gensler may have ruled that all digital assets except bitcoin are securities, but his opinion is not law. The SEC has no authority to regulate them until proven in court. For each asset, individually, one by one,” said Jake Chervinsky, policy maker at the Blockchain Association.
Chair Gensler may have prejudged that every digital asset aside from bitcoin is a security, but his opinion is not the law. The SEC lacks authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time.
— Jake Chervinsky (@jchervinsky) February 26, 2023