Gary Gensler, Chairman of the Securities and Exchange Commission (SEC) said in a statement that cryptocurrencies such as tokens and stablecoins supported by traditional securities might fall under the securities act.
Gensler made the statement in advance to the American Bar Association Derivatives and Futures Law Committee Virtual Mid-Year Program. He, along with others, discussed a variety of topics including credit default swaps, security-based swaps, and registration of their dealers and participants before commenting on the topic. He said:
“I’d briefly like to discuss the intersection of security-based swaps and financial technology, including with respect to crypto assets. There are initiatives by a number of platforms to offer crypto tokens or other products that are priced off of the value of securities and operate like derivatives.”
“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.”
Regulations on asset-backed digital currencies
Gensler didn’t give any names, but the statements might have been made to address the SEC’s recent scrutiny against the stablecoins which are gaining more traction amongst the regulatory bodies. He continued saying that if the companies are distributing asset-backed products, then these participants should register under the Securities Act of 1933.
The SEC has taken a number of actions against companies in the crypto-space so far.
Gensler is not the first to demand new regulations on the stablecoins. Recently, the US Treasury Secretary pressed the US regulators to enforce regulations on stablecoins and other asset-backed tokens.