SEC’s Gensler dismisses crypto’s threat to move overseas
Now, as Europe moves ahead with digital asset rules and US lawmakers remain locked in a deadlock over the need for new regulations, crypto giants are threatening to move their operations across the Atlantic.
Gensler brushed off concerns about the state of the US industry as he faces a wave of criticism from digital asset leaders and their allies in Congress over how he regulates the space. House Republicans are increasing oversight of his crypto enforcement actions and plan to scrutinize his every move, but he is also under pressure from progressives such as Sen. Elizabeth Warren to continue squeezing down.
Still, Gensler said the flurry of lawsuits and enforcement actions hasn’t done much to convince firms to follow the law.
He said crypto companies have avoided what usually happens when agencies crack down on bad behavior in financial markets. Instead of complying with U.S. securities, “this is a field that seems to believe that in some circumstances,” he said.
“The path to compliance is clear. It is [that] In some respects, the firms have generally operated outside these parameters, he said.
Gensler, a Democrat who chaired the Commodity Futures Trading Commission under the Obama administration, has long argued that securities laws already apply to digital asset companies and that the agency does not need broad new authority from Congress.
Top firms like Coinbase and Ripple have resisted these claims and have lobbied lawmakers and regulators to create new rules for their industry — an effort that will soon pay off in Europe with the Markets in Crypto Assets Act, or MiCA.
Gensler is skeptical about the effectiveness of the European law.
“Do you know MiCA doesn’t even cover Bitcoin?” he said, before adding that while the SEC often consults and talks with its international counterparts, it needs to “focus on how best to help the American public.”
US lawmakers are still debating how to regulate the market’s exchanges and brokerages.
Crypto lobbyists have framed Gensler’s push to force their industry to comply with 90-year-old securities laws as a war on financial innovation. Whatever changes crypto markets bring will pale in comparison to what could come as brokerages and financial data aggregators move to incorporate artificial intelligence into their offerings, Gensler said.
“The much more transformative technology right now in our time is predictive analytics and everything that underlies artificial intelligence,” he said, adding that he looked forward to working with lawmakers on how to regulate these tools.
Zachary Warmbrodt contributed to this report.
