U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said he was worried that a proposed bill aimed at creating a regulatory framework for cryptocurrencies could undermine investor protections in traditional financial markets.
SEC doesn’t want to weaken financial protections
Speaking at the Chief Financial Officers Network Summit on June 14, Gensler shared his views on the cryptocurrency bill introduced on June 7 by Sens. Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY). “We don’t want to weaken the protections we have in the $100 trillion capital market.”
protections
He added: “We don’t want our existing stock exchanges, hedge funds or public companies, accidentally with just a stroke of a pen, saying ‘you know what, I also want to not comply, I want to be outside of this regime which I think has brought quite a lot of benefits to investors and economic growth. It’s been 90 years.”
Lummis-Gillibrand’s bipartisan “Responsible Financial Innovation Act” aims to address many aspects of cryptocurrency regulation such as tax treatment of digital assets, stablecoins and agency jurisdiction.
The bill declares some cryptocurrencies to be securities
A provision of the bill that gives “clear authority” to the Commodity Futures Trading Commission (CFTC) over the digital asset spot market, Gensler has long steadfastly stated that most cryptocurrencies are securities, subject to the JURISDICTION of the SEC.
The Senators almost agreed with Gensler’s view, saying that some altcoins would likely be considered securities under the proposed law, with Bitcoin (BTC) and Ethereum (ETH) considered commodities.
At the summit, Gensler said the SEC is not seeking to expand its jurisdiction and that some cryptocurrencies are already under the authority of the agency because they qualify for security.
“We are just looking for the retail […] public these tokens that are being made available to the public and the public is hoping for a better future. That’s the characteristic of the investment contract.”
Meanwhile, CFTC commissioner Christy Goldsmith Romero — who said she hasn’t read the Lummis-Gillibrand bill — welcomed congressional regulatory action when speaking at an event on June 14.
Romero, who is also a former senior adviser in the SEC’s enforcement division, was asked whether the view that the CFTC is a more passport-regulating authority than the SEC is correct.
“No, absolutely not. They’re actually quite similar.” She suggested that the CFTC has taken many enforcement actions in the cryptocurrency space and that each agency is interested in having “close oversight of the market.”
Romero said the CFTC has allowed more cryptocurrency products to trade on its regulated exchanges with 18 products traded across 11 regulated entities:
“That means the CFTC is quite experienced and how to regulate trading in this market, and that’s really helpful as we move forward. The CFTC will still cooperate and coordinate with the SEC, I am 100% committed to that, which is my old home. ”
