SEC: New Laws for Cryptocurrencies Are Unnecessary

SEC: New Laws for Cryptocurrencies Are Unnecessary

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said there is no need for additional legislation for cryptocurrencies, reports The Block. Existing securities laws cover most of the activity that happens in the cryptocurrency markets, Gensler told reporters after a March 29 hearing at the U.S. House Committee on Appropriations.

During the hearing, he said that the rules for regulating cryptocurrencies already exist and they are called the regulation of securities. Gensler also drew the attention of lawmakers to the fact that many of the proposed regulatory mechanisms would undermine the scope of securities laws if passed.

Senators Kirsten Gillibrand and Cynthia Lummis plan to introduce a new bill in April, the report said. According to the publication, this document claims that the control of digital assets such as bitcoin falls within the scope of another regulator, the U.S. Commodity Futures Trading Commission (CFTC).

On whether cryptocurrencies are commodities or securities, the opinions of the SEC and the CFTC differ. A few days before the hearing, the CFTC sued the largest crypto exchange Binance for unregistered trading activities. In its lawsuit, the CFTC claims that leading cryptocurrencies such as Bitcoin and Ethereum are commodities.

Gensler reiterated at the hearing that most cryptocurrencies are securities and said that foreign entities that sell cryptocurrencies to investors in the US must be subject to securities laws, but also mentioned the CFTC.

At the same time, he noted that only the SEC and the courts can determine whether an asset is a security, but not individual crypto exchanges.

A week before the hearing, the SEC accused the head of the Huobi exchange, Justin Sun, and three of his companies – Tron Foundation, BitTorrent Foundation and Rainberry (the developer of the BitTorrent protocol) – of an unregistered offer and sale of securities in the form of Tronix (TRX) and BitTorrent (BTT) cryptocurrencies.

At the same time, the regulator warned the Coinbase exchange that it plans to take enforcement action against it in connection with possible violations of securities laws.

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