SEC’s Gensler Insists Clear Crypto Market Rules ‘Already Exist’

The chairman of the US Securities and Exchange Commission, Gary Gensler, said today that rules for the cryptocurrency market already exist – but that the industry remains “riddled with non-compliance.”

Testifying before the House Appropriations Subcommittee on Financial Services and General Government on Wednesday, the SEC chief reiterated his point that the vast majority of coins and tokens in the crypto space are securities.

Congressman Sanford Bishop (D-GA) asked the chairman today if the SEC has “plans to issue a rule to clarify how securities laws apply to digital assets,” echoing a common refrain from the crypto industry that has for years called for “regulatory” clarity .” Gensler, in typical form, maintained that the rules of crypto could not be clearer.

“The rules actually already exist, sir. They’re called the Securities Regulation, and so there are disclosure rules for when someone is trying to raise money from the public, the SEC chairman said.

Gensler has repeatedly said in the past that most digital assets – but not the largest and oldest Bitcoin – fall under the security definition. “Crypto tokens – without anticipating any of them – you can look at almost, most of them, and you can find a group of entrepreneurs with a Twitter page, with a website, with individuals, and I bet they most of you are not visited by decentralized, nonexistent leadership,” he said.

The SEC has continued to pursue what industry observers refer to as a “regulation by enforcement” approach to crypto, cracking down on companies and projects that push what the regulator considers unregistered securities.

“We’ve seen the wild west of the crypto markets, full of non-compliance,” Gensler said, adding that rules were already in place to protect consumers.

“Honestly, out of the ten or twelve thousand tokens, there are very few that don’t have a group of entrepreneurs in the middle that the public counts on,” he continued when asked by Congressman Bishop about the details of crypto regulation. “These are securities under the Securities Act.”

The SEC has targeted some of the most recognizable crypto brands this year – with the crackdown intensifying following the swift and unexpected bankruptcy of digital asset exchange FTX in November.

In January, the Commission arrived hit Genesis and Gemini with fees for offering unregistered securities.

Last month, that fined US crypto exchange Kraken $30 million for violating securities laws.

And just last week, that issued one Wells Alert to America’s largest crypto exchange, the publicly traded Coinbase, alleging that the San-Francisco-based company’s investment products constitute unregistered securities. The notice means that an enforcement action against Coinbase is likely underway.