• 17 July, 2024

Gensler’s Crypto Stance Gets Timid with Rising Criticisms

The U.S. SEC chairman, Gary Gensler, time and again exhibits enough commitment to weave a conducive cryptocurrency environment for investors and stakeholders alike.

Fines and toughening policies have followed Gensler’s stringent regulatory treatment of the Cryptoverse.

But the wave of developments he has shaped lately can’t stop drawing criticisms with Cryptoverse companies’ recent debacles.

The SEC still hasn’t shed light on which cryptocurrencies it considers securities; while it maintains time and again that a number of cryptocurrencies in the market could qualify as securities.

Gensler states incumbent laws do provide clarity on crypto market regulation.

In a Bloomberg interview, Gensler stated crypto investors can already seek enough protections from the current laws. He further stated market intermediaries, like crypto trading and lending platforms, are actually required to work in-sync with SEC’s compliance standards.

Gensler states,

Nothing about the crypto markets is incompatible with the securities laws. Investors have benefited from nearly 90 years of well-crafted protections that provide investors the disclosure they need and that guard against misconduct like misappropriation of customer assets, fraud, manipulation, front-running, wash sales, and other conflicts of interest that harm investors and market integrity.

BlockFi, for instance, recently ended-up shedding $100 million in fines pertaining to registration lapses.

Insider trading charges against a former Coinbase employee involving seven unregistered crypto assets being offered by Coinbase is equally notable.

Public filings reveal the SEC is reportedly assessing Coinbase’s processes pertaining to selecting which cryptocurrencies to offer to its clients.

Coinbase CEO, Brian Armstrong, reportedly stated

SEC didn’t entertain a new feature Coinbase was intending to offer, wherein SEC’s decision led to preventing users to earn interest on their crypto assets.

SEC then went on to issue a “Wells notice” against Coinbase, thereby communicating an initiation of an enforcement action against Coinbase.

Slava Demchuk, CEO, AMLBot and AMLSafe, reportedly states,

It looks like the SEC is focused on all the wrong things, and as a result, the crypto industry is suffering from cases like FTX. And while it is easy to find a balance between regulation and innovation, I concede that it is important to introduce regulations asap; otherwise, investors and users will lose trust in the industry.

Przemysław Kral, CEO, Zonda Global, states,

As a key individual responsible for protecting U.S customers against securities fraud, there’s little doubt that his approach has failed to some degree. Any regulatory framework that fails to protect customers in the first instance should be considered antithetical to promoting growth within an industry.

But failures of FTX, Celsius, Vauld, Voyager, and Terra,

U.S. Representative Tom Emmer, states  Gensler’s crypto oversight strategy is

Indiscriminate and inconsistent approach.” He states, “Congress shouldn’t have to learn the details about the SEC’s oversight agenda through planted stories in progressive publications.

After this, Gensler’s ultimatum ensued in the form of a new rule mandating cryptocurrency intermediaries to register with the SEC.

But Republican Pat Toomey flags the SEC’s failure in clarifying the navigation for the crypto industry amidst “being asleep at the wheel,” while Celsius Network and Voyager Digital collapsed.

Emmer, in fact, goes on to state that Gensler and Sam Bankman-Fried (SBF) might in-fact be colluding, along with the FTX team. Emmer tweeted:

How the SEC-XRP collision shapes in the light of the post-FTX crypto world needs to be seen.

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