mention virtual currency
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler testified before the U.S. House of Representatives Appropriations Subcommittee on the 29th, and also mentioned crypto assets (virtual currencies).
What is SEC
An abbreviation for “Securities and Exchange Commission,” a US government agency that supervises the trading of securities such as stocks and bonds. Its purpose is to ensure fair transactions and protect investors.
Gensler joined the subcommittee to make budget requests, not to speak specifically about cryptocurrencies. By way of introduction, he said that his testimony is his personal opinion and does not represent his opinion on behalf of the SEC.
Cryptocurrencies were mostly mentioned in testimony about market growth and changes. He said there are more investors across financial markets, and that tools and techniques are now available that were not available just a few years ago. And, as before, he likens cryptocurrencies to the “Wild West” of the 19th-century Wild West, arguing that the cryptocurrency industry is not compliant enough.
connection: U.S. SEC Chairman Gensler, virtual currency development is possible only within a regulatory framework
He also explained that in the current cryptocurrency market, investors are exposed to the risk that the assets are highly speculative. He testified that the SEC itself must grow as the market changes rapidly and crime also increases, and that funds and resources are needed according to the mission.
He pointed out that modern changes include the spread of online trading, the cloud, AI (artificial intelligence), and predictive data analysis. In addition, investor communication tools such as Reddit and statements by celebrities are diversifying.
Gensler concludes that the SEC wants to increase budgets and resources to keep up with these changes and protect the American people.
connection: U.S. SEC investigates Coinbase on suspicion of violating securities laws Sends Wells notice
Application of securities laws
A question-and-answer session was also held on this testimony. Mr. Gensler, who pointed out that the standards for applying the securities law to virtual currencies are unclear, said that, as before, most virtual currencies fall under the category of securities. They answered that the regulation of virtual currency is clear.
He also explained that everyone has an obligation to disclose information when collecting funds from general consumers. He points out that many virtual currencies have groups of entrepreneurs who have Twitter accounts, websites, etc., and cannot be said to be decentralized and without administrators.
As mentioned above, Mr. Gensler has long argued that most cryptocurrencies fall under securities. In September of last year, it was also revealed that the cryptocurrencies based on Proof of Stake (PoS) were all likely to be securities.
connection: U.S. SEC Chairman Gensler “Possibility of PoS-based virtual currency as securities”