U.S. Securities & Exchange Commission (SEC) Chairman Gary Gensler said the regulator is not planning to ban cryptocurrency.
At the House Committee on Financial Services hearing (Video Below) held on October 5, Gensler said the United States will not adopt China’s policy to prohibit digital currencies.
Gensler reiterated that the focus of the government is to ensure that the cryptocurrency industry complies with consumer and investor protection laws, anti-money laundering rules as well as tax laws.
“It’s a matter of how we get this field within the investor consumer protection that we have and also working with bank regulators and others. How do we ensure that the Treasury department has it within anti-money laundering, tax compliance, Many of these tokens do meet the test of being an investment contract, or a note, or security.”
During the hearing, Gensler’s SEC chief’s remarks were a reflection of his previous thoughts about the regulation of cryptocurrency, which included the requirement for digital asset firms to sign up with the SEC. Gensler said that although crypto exchanges must sign up with the regulator, exchanges that are decentralized could as well be required to adhere to the same rules.
The SEC chairman continued to discuss his position regarding stable coins, saying that they may pose risks for the economic system.
Gensler has previously described the stable coins as “poker chips” in the casino. With an estimated 125 billion dollars in stable coins, the market which has increased tenfold in the last year may create system-wide risk.
Gensler stressed that the SEC’s policy will be “very different” than that of the Chinese government and that the ban of any kind on digital assets would need to be enacted by Congress.
Whether most of the crypto are securities or not he said:
“I’m not going to get into anyone token, but I think the securities laws are quite clear — if you’re raising money and the investing public, have a reasonable expectation of profits based on the efforts of others, that fits within the securities law.”