December 2, 2023

“Crypto exchanges must come and register”

US Securities and Exchange Commission (SEC) Chairman Gary Gensler continues to stick to his guns andcrush the cryptocurrency industry. During the hearings in the US Congress, he called for cryptocurrency exchanges to register with the SEC.

«Crypto exchanges should come and register. Or, frankly, we intend to use the powers that Congress has given us within the framework of law enforcement and expert functions.

The statement was made in response to a remarkone of the congressmen that the SEC was unable to create clear rules for regulating the cryptocurrency market. After all, before punishing, it is necessary to explain the rules. To date, the SEC has filed over 80 lawsuits against cryptocurrency companies and their products.

Gensler responded that such actions were within the purview of his agency:

“It seems to me that the rules here are actually very clear: if you collect money from the population, and they expect profit from the efforts of the one who finances, then there should be guarantees.”

However, not all so simple.The SEC does not explain in any way which cryptocurrency assets it classifies as securities, and which can be called goods or commodities (that is, not subject to its jurisdiction). For example, Gensler considers bitcoin to be a commodity. Due to the blurred boundaries and variety of cryptocurrency products, companies that produce them often do not really understand whether they need to negotiate with the SEC. Therefore, getting to court on claims from the regulator and paying impressive fines, they express dissatisfaction.

Last month, Gensler put forward a freshinitiative: asked his staff to engage with the Commodity Futures Trading Commission (CFTC) to find ways to register and regulate cryptocurrency platforms.

The SEC regulates securities, which are investment products such as stocks and bonds that people buy for profit.

The CFTC, in turn, regulates commodityfutures are financial instruments that allow people to buy and sell goods in the future at a predetermined price. Together they cover the entire market for traditional financial services and products. So a joint SEC-CFTC regulatory and oversight process may be able to clear up some of the confusion by giving cryptocurrency exchanges a single regulatory body to operate in the US.