Gensler: Crypto firms know exactly how to register, they just don’t want to
In his first public remarks directly on recent SEC enforcement actions, Gensler was having no tolerance for any company who refuses to register
SEC Chair Gary Gensler defended his agency’s recent enforcement actions against Binance and Coinbase and issued a stark warning to any other businesses operating in the space: Comply, or you can expect a lawsuit, too.
Gensler did not mince his words during a virtual appearance at the 2023 Global Exchange and Fintech Conference Thursday, demanding that crypto firms follow existing laws. There is no need for further congressional action, as many in the space have called for, he said.
“It’s the law of the land,” he said, defending the SEC’s ability to oversee crypto markets.
Crypto companies have no excuse to not be operating within the rules, Gensler added, dismissing any claims that companies are unable to comply under existing laws.
“We’ve issued a reopening release that reiterated the applicability of existing rules to platforms that trade crypto assets securities, including so-called DeFi systems, that’s already the law. That’s already the rules,” Gensler said. “Not liking the law, not liking the rules is different than not hearing it or not getting it.”
There is no ‘regulatory clarity’ needed, Gensler added, arguing that issuers and broker-dealers and exchanges should know exactly how to comply.
The SEC head also doubled-down on his long-time stance that crypto markets are ripe for manipulation and fraud.
“We’ve also seen numerous companies before and after FTX blow themselves up, hurting countless investors in their way, hundreds of thousands, and sometimes millions around the globe,” Gensler said. “The crypto securities markets should not be allowed to undermine the well-earned trust of public capital markets.”
Days after his agency announced aggressive charges against exchanges Binance and Coinbase, Gensler firmly stood by the lawsuits, alleging the exchanges explicitly and knowingly violated securities laws.
The SEC head argued that the current crypto market is rife with scams that have arisen because of the industry’s lack of compliance with securities laws, stating:
“With wide-ranging noncompliance, frankly, it’s not surprising that we’ve seen many problems in these markets. We’ve seen this story before. It’s reminiscent of what we had in the 1920s before the federal securities laws were put in place. Hucksters. Fraudsters. Scam artists. Ponzi schemes.”
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