Gensler: SEC could tailor disclosures for crypto firms

Quick Take

  • A top financial regulator suggested the Securities and Exchange Commission could tailor disclosures to accommodate crypto companies while protecting investors.
  • The new comments from SEC Chair Gary Gensler provide clues about the agency’s regulatory plans for digital assets.

The US Securities and Exchange Commission (SEC) could tailor disclosures to suit crypto companies, Chair Gary Gensler said Thursday, offering new insight into the commission’s future rulemaking.

“I've said to the industry, to the lending platforms, to the trading platforms, come in, talk to us. We do have robust authorities from Congress, also, to use our exemptive authority so that we can tailor investor protection,” Gensler said during a Yahoo Finance interview on Thursday. 

“Even tailoring what the disclosures might be, because maybe not all of the disclosures for somebody issuing equity are the same as a crypto token. But I would note we don't have the same disclosures for an asset-backed security that we do for a stock offering,” Gensler said. “So it’s a thoughtful way to sort of tailor things.”

Gensler’s comments come during a downturn in the crypto market. JP Morgan Chase analysts warn the price of bitcoin could keep falling.

This week, crypto lender Celsius filed for Chapter 11 bankruptcy protection in New York.  The SEC chief warned that the public lacks protection because some platforms and tokens don’t comply with regulations, despite the SEC’s ability to write rules and use its exemptive authority to ensure compliance. 

“The public benefits by knowing full and fair disclosure and that somebody's not lying to them. You know, basic protections,” Gensler said. “We in America let investors take risks, you get to decide what risks you want to take. But the person raising the money and selling you those financial assets, ought to not defraud you, ought to give you the information so you can make your decisions.”

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.