SEC Chair Gensler stays the course in push for crypto compliance ahead of Tuesday hearing

Quick Take

  • SEC Chair Gary Gensler, who is set to appear in front of the Senate Banking Committee on Tuesday morning, appears persistent in arguing that crypto has to abide by the same laws as other securities like stocks.

Securities and Exchange Commission Chair Gary Gensler will face the Senate Banking Committee tomorrow to adamantly propose, again, that many cryptocurrencies fall under the agency's jurisdiction. 

Gensler, who is set to appear on Tuesday morning at a hearing, appears persistent in arguing that crypto has to abide by the same laws as other securities like stocks, weeks after the agency has seen some setbacks in the courts.

"Given this industry's wide-ranging noncompliance with the securities laws, it's not surprising that we've seen many problems in these markets. We've seen this story before. It's reminiscent of what we had in the 1920s before the federal securities laws were put in place," he said in prepared testimony released on Monday. 

"Thus, we have brought a number of enforcement actions—some settled, and some in litigation—to hold wrongdoers accountable and promote investor protection," Gensler added.

Moving through the courts

As Congress has officially rolled back in to Washington after a summer recess, Gensler is likely to face questions about several court decisions seen over the past several weeks. 

Grayscale got a win in late August when a D.C. circuit judge ruled that the SEC has to re-review the asset manager's bid for a spot bitcoin ETF.

A month earlier, Ripple Labs received a partial win when Judge Analisa Torres ruled that some of Ripple's sales, called programmatic, of XRP did not violate securities laws because of a blind bid process in place for them. She also ruled that other direct sales of the token to institutional investors were securities, leaving a partial win for the SEC.

The hearing comes several months after the SEC sued both Coinbase and Binance for not registering as an exchange.

Gensler said in his prepared testimony that he would not be talking about ongoing litigation. 

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