Gary Gensler Threatens Action Against Unregistered Crypto Platforms

Gary Gensler threatens action against unregistered crypto exchanges as he testified before Congress, so let’s read more about it in today’s latest cryptocurrency news.

Testifying before Congress, Gary Gensler threatens that more action against crypto companies could be on the way. He added:

“The crypto exchanges should come in and register, or, frankly, we’re going to continue to bring, use what Congress has given us, in our enforcement and examination functions.”

The statement came in response to questioning from Representative Steve Womack who expressed his displeasure at what was perceived to be the SEC’s enduring failure to create an explicit set of regulations for crypto. Making an analogy to football, Womack warned:

“Before an official can throw a flag—do an enforcement action—you gotta know the rules.”

The SEC brought more than 80 enforcement actions against crypto asset offerings and platforms and Gensler argued that these actions were in the agency’s purview saying:

 “I think the rules are actually quite clear that if you’re raising money from the public, and the public anticipates a profit based on the efforts of that sponsor, that’s a security.”

The SEC has not clarified whcih crypto assets it classifies as securities versus some that it’s said could be considered commodities and in the same congressional session, Gensler referred to BTC as a commodity. Because of the blurred lines posed by crypto and crypto assets, most companies fined or subpoenaed by the SEC expressed frustration at doing their best to allow the laws to later face legal repercussions. To remedy this issue, Gensler stated his desire to create a novel registration and regulation for crypto that will be overseen by both SEC and the CFTC.

Gensler testified to review the SEC’s budget for 2023 and argued that more resources are needed to regulate crypto:

 “I wish we had more to be able to dedicate to this. … We’re really out-personed.”

Earlier this month, the SEC announced it was expanding the Crypto Assets and Cyber Unit to over 50 personnel, and in his testimony today, he claimed that additional resources would be needed to protect the crypto consumers from risks like the one we saw with Terra’s UST stablecoin:

“There was one crypto complex that went from like $50 billion to near-zero just within the last three weeks. These are highly speculative, volatile, and—I would daresay often—the public is not protected.”