After filing lawsuits against Binance and Coinbase, US Securities and Exchange Commission (SEC) Chairman Gary Gensler has made clear his intentions regarding the digital asset class. He emphasized in a recent interview that these are securities.
It must be registered with the agency before being offered to investors or meet requirements for obtaining waivers, CNBC says a report quote it. He added that exchanges that list cryptocurrencies must register with the regulatory agency.
Cryptocurrencies are investment contracts
“Congress has included a long list of more than 30 elements in the definition of securities, including the term ‘investment contract’…. The vast majority of cryptocurrency tokens meet the investment contract test. … Thus, digital currency security issuers need to register offer and sell their investment contracts with the SEC or meet exemption requirements,” Gensler said.
He was speaking remotely at the Piper Sandler Global Exchange and FinTech Conference in New York City on June 8.
“Halkers. Scammers. Scam artists. Ponzi schemes. The public left queuing up in bankruptcy court.”
This is how the chairman of the Securities and Exchange Commission described the current cryptocurrency landscape, describing it as reminiscent of the time before the advent of the federal securities laws in 1933.
Emphasizing the role of regulators in cryptocurrency trading, Gensler emphasized that people’s confidence in the capital market should not be undermined by allowing unregulated cryptocurrency markets.
“Cryptocurrency markets should not be allowed to undermine the public’s well-earned confidence in the capital markets. Digital currency markets should not be allowed to harm investors.”
The SEC chief also dismissed the notion that there is a lack of clarity around whether crypto assets are securities.
“When crypto-asset market participants go on Twitter or TV and say they lack ‘fair notice’ that their behavior may be illegal, don’t believe it. … They may have made a calculated economic decision to take the risk of enforcement as a cost of doing business.”
Lawsuits Against Binance and Coinbase
Citing the wrongdoing, the SEC filed lawsuits against Binance and Coinbase earlier this week. The charges against Binance include selling unregistered securities – BNB and BUSD – and acting as an unregistered securities exchange and broker-dealer in the United States.
The lawsuit seeks to overturn the “illicit funds” and permanently ban the company from operating as a cryptocurrency and securities business in the United States. Based on the legal move by the SEC, the US District Court for the District of Columbia has issued a subpoena against Binance CEO Changpeng Zhao (CZ). However, CZ was exempted from personal appearance.
In particular, he tasked the two exchanges with blending funds, broker-dealer and clearinghouse functions. Binance was also accused of mixing up the funds. In response to the news, Coinbase CEO Brian Armstrong He saidIn connection with the SEC complaint against us today, we are proud to represent the industry in court to finally gain some clarity on crypto rules.
Binance Free $100 (Exclusive): Use this link to sign up and get $100 free and 10% off Binance Futures first month (conditions).
PrimeXBT Special Offer: Use this link to register and enter code CRYPTOPOTATO50 to receive up to $7,000 on your deposits.
