Gary Gensler, the chairman of the Securities and Exchange Commission, has remained tight-lipped about new crypto token advice.
Sen. Pat Toomey, the committee’s top Republican, wrote Gensler a series of follow-up questions on cryptocurrencies after a hearing before the Senate Banking Committee in September.
Gensler kept to the broad interpretation of existing statutes and the Howey and Reeves criteria that he has promulgated since taking office in his comments released on December 3.
Gensler effectively argues that the SEC does not need to identify which crypto assets are and are not securities because existing laws and court judgments have established wide guidelines – an approach that has upset many in the crypto business.
Toomey urged Gensler to “explain the particular qualities that separate a cryptocurrency that is a security from one that has been labeled a commodity” in response to questions from the hearing.
“Thus, it depends on the precise facts and circumstances, whether any given financial product, including a crypto asset, is being offered or sold as a security,” Gensler said, citing the prior laws.
He also dodged a question from Toomey about a hypothetical dollar-backed stablecoin with reserves in FDIC-insured US institutions, and whether or not that token would be considered a security.
“Chairman Gensler’s refusal to give clear rules of the road for cryptocurrencies emphasizes the necessity for Congress to act,” Toomey said of Gensler’s comments.
Surprisingly, Gensler has stated that he agrees that Congress has to act on a crypto regulatory framework. During his tenure, the SEC, on the other hand, was more concerned with bringing big trading and lending platforms to heel than with pursuing specific token issuances.
This is most likely because the SEC, under his predecessor, Jay Clayton, effectively put a halt to the ICO boom.