Gary Gensler, reaffirmed his stance on crypto market regulation amid news of lawsuits against Coinbase and Binance.
Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), reiterated his stance on crypto regulation in the aftermath of recent lawsuits filed against Coinbase and Binance.
Before the Piper Sandler Global Exchange and Fintech Conference, he made a number of insightful remarks. Gensler once again drew a connection between the digital assets market and the securities laws, stating that compliance with the laws is the foundation of trust in the United States capital markets.
In addition, he cautioned that similar bankruptcies to FTX could continue to occur if crypto businesses do not comply, but he failed to address how precisely crypto businesses are to comply. Intriguingly, the chair of the SEC emphasized the need to safeguard investors, stating that the crypto markets should not be permitted to injure them.
In his speech, Gensler mentioned a 2018 conversation between Binance’s then-chief compliance officer Samuel Lim and a colleague regarding the crypto exchange’s unlicensed status as a U.S. securities exchange. The same information was included in the recent SEC complaint against Binance, which accused the company of deceiving regulators.
Gary Gensler Caution the Crypto Market
In his introductory remarks, Gensler reiterated that most cryptocurrencies qualify as securities because they pass the investment contract test. However, the SEC chair emphasized that noncompliance could contribute to an increase in anti-crypto enforcement actions.
He stated, “Not liking the message is not the same thing as not receiving it,” indicating that market participants are well-informed about current affairs. This attempts to shield the SEC’s arguments in the numerous crypto-related lawsuits that may involve the ‘lack of clarity’ posture regarding regulations
“When crypto asset market participants go on Twitter or TV and say they lacked “fair notice” that their conduct could be illegal, don’t believe it. They may have made a calculated economic decision to take the risk of enforcement as the cost of doing business.”
On June 13, 2023, market participants for digital assets will anticipate the release of Hinman documents in the XRP vs. SEC lawsuit.
