Gensler :“Crypto Needs Trust To Survive”
Date
9/27/2024 3:22:25 PM
(MENAFN- eTrendy Stock)
In a recent interview with CNBC, SEC Chair Gary Gensler emphasized the need for trust and transparency in the Cryptocurrency sector.
Gensler drew parallels between crypto and innovations like the automobile, stating that innovation requires proper regulation to ensure market safety. He reiterated the SEC's role in overseeing the industry, referring to the agency as the“cops on the beat,” working to protect investors from fraud and misconduct.
Gensler Defends SEC Enforcement Actions
Gensler defended the SEC's enforcement actions against key figures and firms in the crypto industry, mentioning Sam Bankman-Fried (SBF) and others facing legal consequences. He noted that several individuals are either in jail or dealing with significant financial penalties.
He pointed out, saying:“A number of them are in jail right now. I'm not just talking about SBF; several others.”
Gensler pointed out that these enforcement measures aim to prevent fraud and protect investors who have lost billions due to failed projects and bankruptcies. He highlighted the importance of clear regulations to foster a safer investment environment.
Bitcoin's Classification and the Howey Test
During the interview, Gensler reiterated that Bitcoin is not classified as a security under the SEC's regulations. He cited the Howey Test, a legal framework determining whether an asset qualifies as a security. Gensler explained that Bitcoin, functioning like a decentralized commodity such as gold, does not meet the criteria for regulation as a security. This distinction sets Bitcoin apart from other cryptocurrencies, which have faced scrutiny for raising capital through unregistered securities offerings.
Gensler clarified that the SEC's approach to regulation is focused on protecting investors from fraud and conflicts of interest. He also addressed concerns regarding the lack of regulatory clarity in the crypto space, stating that there are clear rules in place. According to Gensler, disagreements stem from the industry's reluctance to comply with the existing regulations, not from the absence of rules.
Gensler also discussed the SEC's actions against Ripple Labs, fined $125 million for violating securities laws by raising capital through unregistered token offerings. He noted that the SEC would continue its efforts to regulate the crypto market and protect investors from fraudulent activities and market manipulation.
Gensler stated that the SEC's enforcement actions are part of a broader effort to establish a more transparent and trustworthy cryptocurrency market.
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