• SEC Chair Gary Gensler defends the recent crackdown on crypto exchanges, stating they were warned.
• He criticized them for failing to register and comply with securities laws.
• Gensler dismissed claims from exchanges that stated they lacked “fair notice” that their conduct could be illegal.
SEC Defends Crypto Crackdown
SEC Chair Gary Gensler defended his agency’s lawsuits against Binance and Coinbase, stating that crypto exchanges had been warned about potential legal action if they failed to register and comply with securities laws. He dismissed any claims of a lack of „fair notice“ regarding potential illegality.
Gensler’s Criticism of Crypto Exchanges
Gensler argued that exchanges made a „calculated economic decision“ not to comply with securities laws, rather than simply being unaware that such compliance was necessary. He also suggested some met with the agency but failed to make changes to become compliant. To back up his claim, he cited leaked chat logs from a former Binance Compliance Lead who admitted the exchange was acting as an unlicensed security exchange in the US.
SEC Views on Crypto Assets
Gensler highlighted the need for crypto security issuers to register their investment contracts as securities in order for investors to be granted critical protections under applicable law. He also reiterated his stance that most crypto assets are securities due to their value depending on external efforts by promoters or third parties.
Implications of Gensler’s Leadership
The future of crypto regulation under Gensler’s leadership could reshape the crypto landscape significantly, making it essential for intermediaries and other market participants to understand what is required of them in order remain compliant with applicable law.
Crypto exchanges have received stern warnings by SEC Chair Gary Gensler regarding potential legal action should they fail to register and comply with securities laws, signaling a shift towards stricter enforcement surrounding cryptocurrency trading activities going forward.