Gary Gensler, the Chair of the U.S. Securities and Exchange Commission (SEC), is scheduled to testify before the Senate Committee on Banking, Housing, and Urban Affairs at a Congressional hearing on Tuesday, September 12, 2023. The focus of the hearing is the oversight of the SEC. In his pre-hearing testimony, Gensler reiterated his belief that investors in the cryptocurrency market should be afforded the protections provided by U.S. securities laws.
Gensler maintained his stance that a majority of crypto tokens likely meet the investment contract test, indicating that they should be treated as securities. This position is notable considering the recent XRP lawsuit, in which the judge rejected the SEC’s argument that the retail sale of tokens constitutes securities transactions.
The SEC Chair emphasized that since most crypto tokens fall under securities laws, it follows that crypto intermediaries must also comply with these laws. Gensler expressed concern about the industry’s widespread non-compliance, which has contributed to numerous issues in the crypto markets.
The full committee hearing on the Oversight of the U.S. SEC can be watched live on the Senate panel’s website. It remains to be seen whether Gensler’s comments will elicit any specific reaction from the crypto market, particularly in relation to the price of Bitcoin.
In addition to discussing investor protection, Gensler highlighted the SEC’s enforcement actions against crypto businesses. The agency has pursued legal action, both settled and in litigation, to hold wrongdoers accountable and promote investor safety. Notably, the SEC has recently filed lawsuits against two major crypto exchanges, Binance and Coinbase.
Overall, Gensler’s testimony underscores the SEC’s commitment to regulating the crypto industry and ensuring compliance with securities laws, despite ongoing debates and legal challenges.