SEC Chair Gary Gensler believes most crypto tokens promoted in the investment space are securities.
The U.S. Securities and Exchange Commission is well-known for its practice of enforcement regulation actions in the cryptocurrency industry. These actions persist because the American Congress has difficulty categorically classifying crypto tokens as either securities or commodities.
Certain renowned media personalities have been contacted by crypto projects to promote their newly-launched assets in the past. SEC Chair Gensler noted that most of these tokens are, in fact, securities, implying that they can be regulated using securities laws.
“The law is clear on this. I believe, based on the facts and circumstances, most of these tokens are securities. When a group of entrepreneurs is raising money from the public, and they’re anticipating a profit, they need disclosure.” Gensler said.
"The law is clear on this. I believe based on the facts and circumstances most of these tokens are securities," says SEC Chair @GaryGensler on #crypto. "When a group of entrepreneurs is raising money from the public and they're anticipating a profit, they need disclosure." pic.twitter.com/UMuNJRZrfG
— Squawk Box (@SquawkCNBC) October 3, 2022
Gensler made these comments while speaking on a Squawk Box episode Monday. The SEC recently charged prominent media personality Kim Kardashian for promoting EthereumMax tokens (EMAX). According to the charge, the regulatory watchdog highlighted Kardashian’s omission of the remuneration she received from the EthereumMax team for the promotion.
Kardashian received $250k for the promotional message. Consequently, the SEC has demanded $1.26M, which she has agreed to pay. The $1.26M charge includes the $260k the American businesswoman received for promoting EMAX and $1M in penalties.
As reported by The Crypto Basic, Kim Kardashian started Promoting Ethereum MAX in June 2021. On September 7, 2021, the Chairman Of The UK Financial Conduct Authority (FCA) Criticized Kim Kardashian For Promoting Anonymous Crypto Tokens.
Gensler’s remarks also answer top crypto personalities like Ripple CEO and others, who consistently say that the US is behind in crypto from other countries as there are no clear digital-ass laws.
Recall that Gensler previously agreed to allow the CFTC to assume oversight of cryptocurrency tokens. Notwithstanding, the SEC Chair noted that his support would only come if his agency is allowed to regulate crypto tokens it classifies as securities.
CFTC, on the other hand, said that the US has 70 Year Old Case-law to Determine What’s Security or a Commodity.