HomeNewsSEC Chair Gensler Drops Bombshell: Cryptocurrencies Labeled as Securities, Except Ripple's XRP

SEC Chair Gensler Drops Bombshell: Cryptocurrencies Labeled as Securities, Except Ripple’s XRP

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  • SEC Chair Gary Gensler persists in viewing most crypto assets as securities, pointing to industry “noncompliance” as a crisis trigger.
  • Despite defeats against Ripple and Grayscale in court, the SEC’s stance on cryptocurrency regulation remains unyielding.

Amid recent courtroom defeats, the U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler, continues to hold his ground, asserting that most crypto assets are securities and warrant the SEC’s oversight. Gensler attributes the turmoil in the cryptocurrency sector to the industry’s pervasive noncompliance with existing securities regulations.

Drawing Parallels to the Past

Gensler’s reference to the economic depression of the 1920s, a period before the establishment of securities laws, illustrates his belief in the urgent need for stringent regulation in today’s rapidly evolving crypto market. As he prepares for his testimony at the Senate Committee on Banking, Housing, and Urban Affairs scheduled for 12 September, it’s anticipated that this comparison and his strong beliefs on the subject will be reiterated.

The Howey test, a legal yardstick used to ascertain if an asset is considered a security, has frequently been highlighted by Gensler. He stresses that as the majority of crypto tokens align with this criteria, the onus is on crypto intermediaries to adhere to securities regulations. This perspective, however, hasn’t been universally accepted. This became glaringly evident when the SEC’s allegations of federal securities law violations were dismissed in their legal encounters with both Ripple [XRP] and Grayscale.

SEC’s New Initiatives

The hearing is also set to shed light on two of the SEC’s latest propositions. One delves into the custody protocols for crypto assets, while the other aims to revise the definition of ‘exchange’ to formally encompass cryptocurrency platforms.

Cryptos in the Spotlight: Bitcoin & Ethereum

The crypto realm awaits the Senate Committee hearing with bated breath, seeking clarity on Gensler’s evolving views, especially regarding industry titans like Bitcoin [BTC] and Ethereum [ETH]. While Gensler has previously categorized most assets, barring Bitcoin, as securities, he has remained somewhat ambiguous about Ethereum’s exact classification – a matter that has sparked debates between the SEC and the Commodity Futures Trading Commission (CFTC).

As discussions around crypto regulations in the U.S intensify, many critics argue that the current regulatory approach under Gensler’s leadership leans towards enforcement, especially given the murky legal landscape surrounding cryptocurrencies.

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Marcel Knobloch
Marcel Knobloch
Marcel is the managing partner of ETHNews and is also known as Collin Brown in the crypto community. He is a seasoned Bitcoin investor who entered the crypto scene during its early stages and has since become a veteran trader in both the cryptocurrency and forex markets. His journey began in 2012 when he made his first investment in Bitcoin, marking the beginning of his deep-rooted passion for blockchain technology and digital assets. With a mission to demystify the intricacies of blockchain for the masses, Marcel endeavors to bring the world of cryptocurrencies closer to everyone. His insightful reports are dedicated to shedding light on the latest developments and innovations within the realms of Bitcoin, Ethereum, Ripple (XRP), IOTA, VeChain, Cardano, Hedera, and numerous other cryptocurrencies. Marcel's in-depth analysis and commitment to providing accessible information make him a trusted source for both novice and experienced crypto enthusiasts. Marcel's academic background includes a Master's Degree in Business Education, which has equipped him with a solid foundation in financial markets and investment strategies. Over the past decade, he has amassed invaluable experience working with various startups across the globe, enriching his knowledge and understanding of the ever-evolving cryptocurrency landscape. With his wealth of expertise and dedication to empowering others with crypto knowledge, Marcel continues to be a driving force in the cryptocurrency community. Business Email: marcel.knobloch@hotmail.com Phone: +49 160 92211628