SEC Chairman Gary Gensler insists that most cryptocurrencies fall under the agency’s securities regulations.
Stuart Alderoty, Ripple (XRP)’s chief legal officer, claims that Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), may use misleading statements in front of the Senate Financial Services Committee.
In a post shared on September 27th on account X, Alderoty stated that Gensler might claim that the ‘crypto asset securities market’ exists and that tokens could be considered as investment contracts. Alderoty said this statement is incorrect according to a historical ruling made by a judge in the Ripple case. Alderoty stated,
“Perhaps a representative will read this sentence from the July 13, 2023, Ripple decision: ‘XRP, as a digital token, is not a “contract, transaction, or scheme” fulfilling the requirements of an investment contract.”
What Does Gensler Plan to Say?
According to his written statement to the Senate Financial Services Committee, SEC Chairman Gensler will reiterate his views that the crypto industry falls under the Commission’s oversight.
Gensler reiterated his view that ‘most crypto tokens are subject to securities laws’ and stated that the crypto industry is not compliant with existing laws. Gensler indicated that crypto intermediaries, like exchanges, should also comply with securities laws.
The SEC Chairman praised the legislative work done by the Commission and said,
“The SEC clarified the rules regarding crypto security markets. This reiterated that existing rules apply to platforms trading crypto asset securities, including ‘DeFi’ systems.”
Finally, he noted that the SEC imposes sanctions against wrongdoers to protect investors.
Gensler’s stringent regulatory approach towards the crypto industry has received criticism regarding how the SEC applies decades-old securities laws to new crypto finance models such as Decentralized Autonomous Organizations (DAOs) and Decentralized Finance (DeFi) protocols.