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Top US regulator tells crypto exchanges they need to ‘come in and talk to us’

Business Insider |   | Sep 14, 2021

Gary Gensler aspen security forum - Top US regulator tells crypto exchanges they need to 'come in and talk to us'

Securities and Exchange Commission boss Gary Gensler has said crypto exchanges need to "come in and talk" to the markets regulator, just days after clashing with trading platform Coinbase over one of its products.

Gensler will appear before the Senate banking committee on Tuesday and used his prepared remarks to increase the pressure on crypto exchanges, which he has previously said he would like to regulate more closely.

See:  Coinbase Threat Shows SEC Means Business

The SEC boss said exchanges need to register with the Commission, because some of their tokens or products may be securities. That's unlike bitcoin, which regulators think is more like a commodity.

Gensler said:

"I've suggested that platforms and projects come in and talk to us. Many platforms have dozens or hundreds of tokens on them.  While each token's legal status depends on its own facts and circumstances, the probability is quite remote that, with 50, 100, or 1,000 tokens, any given platform has zero securities.  Make no mistake: To the extent that there are securities on these trading platforms, under our laws, they have to register with the Commission unless they qualify for an exemption."

Gensler's strong statement comes after the SEC cracked down on Coinbase, threatening to sue the $64 billion crypto exchange if it went ahead with launching a digital asset lending product called Lend.

See:  Moody’s says Crypto regulation a plus for banks, fintechs

Gensler has previously said that products that bear a specific interest-rate return could fall under SEC oversight as securities. And he has hinted some stablecoins could also feed into that category.

Yet some lawmakers and crypto-industry figures would like to see more action from the SEC in clarifying what it thinks it can, and can't, regulate.

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