U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler got further reinforcement for his quest to force crypto firms to conform with existing securities laws when his agency’s Investor Advisory Committee backed him up on almost every aspect of his campaign except one: The committee requested that the SEC actually provide formal industry guidance.
The committee – a group of people from traditional finance, academia and consumer advocacy groups – sent Gensler a letter dated last week that included a sliver of agreement with the years of requests from cryptocurrency businesses that the SEC give them some official word on how to meet the regulator’s expectations.
“The SEC should consider issuing a request for comment regarding areas where additional guidance is needed related to the application of the federal securities laws to crypto assets,” according to the letter. “The SEC can then use this input to craft additional guidance or propose rules to address issues identified.”
Gensler has repeatedly stated that there’s no need to treat crypto firms any differently than other financial businesses, and longstanding securities laws are ample for regulating the fledgling industry. He’s revealed no outward interest in issuing guidance or working on tailored rules for digital assets.
However, the advisory group – led by Chair Christopher Mirabile of Launchpad Venture Group and Vice Chair Leslie Van Buskirk, the administrator of the Wisconsin Department of Financial Institutions’ securities division – backed him on almost everything else, including that “virtually all, if not all, crypto tokens are securities and that they, as well as the platforms and custodians dealing with them, are subject to regulation under the federal securities laws.” Industry representatives have argued that most cryptocurrencies are not securities as defined under U.S. law.
The letter also argued against legislation that would establish any separate treatment of crypto.
“We think it is very unfortunate and disturbing that there are legislative proposals to carve crypto assets out of the federal securities laws and undermine investor protection,” it said, suggesting the SEC should oppose such congressional efforts.
The committee also advised the agency to “aggressively continue to assert authority over crypto assets” and keep making enforcement a “top priority.”
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Nikhilesh De contributed reporting.