Gensler will not ban cryptocurrencies, but the US Congress has that right because the SEC does not have the authority to ban cryptocurrencies. In today’s crypto news, we learn more about the power of these regulators.
The head of the US Securities and Exchange Commission confirmed that the agency has no authority or intention to ban cryptocurrencies not within the mandate of the SEC, but it is in the power of Congress’:
“The problem is how do we bring this into the consumer protection for investors area that we have, and also work with banking regulators and others – how can we make sure the Treasury Department has this in the context of anti-money laundering and tax compliance. Many of these tokens pass the test as an investment contract, note or security as part of the SEC’s investor protection.
Gensler pointed out that the financial stability issues these stablecoins can cause are a priority for the agency. Representative Patric McHenry targeted the SEC’s actions and attitudes toward digital assets by suing Gensler’s leadership and accusing the SEC’s head of failing to act in accordance with longstanding practice of commenting on building codes and procedures. He noticed:
“Some of your comments have raised questions in the marketplace and made things less clear. You’ve made seemingly unusual market-changing remarks, you’ve circumvented the rule-making by making a statement without due process, and you’ve basically learned the hard way: violence against American investors. “
Gensler said the SEC follows the Administrative Procedure Act. McHenry, on the other hand, cites Gensler’s comments before a US Congressional committee in 2019 when he presented at MIT, where he criticized the SEC’s earlier decisions that classify BTC and ETH as commodities. When asked for his opinion on the matter, Gensler said:
“I won’t go into any of the tokens, but I think the securities laws are pretty clear – when you’re collecting money […] and the investing audience […] Have a reasonable expectation of return due to the efforts of others, in accordance with securities laws. “
While Gensler won’t ban cryptocurrencies, McHenry has proposed the Digital Token Clarity Act of 2021, which puts forward a safe haven proposal from crypto attorney Hester Peirce. During the hearing, McHenry urged Gensler to take the time to consider Peirce’s proposal, but he dodged the answer:
“Commissioner Peirce and I have shared your thoughts on a possible safe haven. I think the challenge for the American public is that if we don’t monitor this and protect investors, people will be hurt. “
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