In DC amidst the continued jockeying over who will be the de facto crypto regulator between the Securities and Exchange Commision (SEC) and the Commodities and Futures Trading Commission (CFTC), SEC chairman Gary Gensler has reiterated his position that crypto exchanges should register with his organisation.
This is a position that chairman Gensler has laid out before, often citing the potential conflicts of interest due to the many roles that crypto exchanges end up taking, and their structural similarity to existing securities exchanges.
Gensler has also repeatedly reiterated that he believes that the “vast majority” of cryptocurrencies are securities, echoing former chairman Jay Clayton’s view that “every ICO I have seen is a security.”
The SEC has also repeatedly cited the lack of a “surveillance-sharing agreement with a regulated market of significant size” in its spot Bitcoin ETF rejections.
Crypto companies and entrepreneurs like Sam Bankman-Fried and FTX have signaled their desire to have the CFTC as the primary crypto regulator rather than the SEC, and have been joined by lawmakers who have introduced bills which would make that explicit. However, SBF does acknowledge that the SEC will take jurisdiction over at least some of the tokens.
This was even referenced in Gensler’s speech when he said, “to the extent the Commodity Futures Trading Commission (CFTC) needs greater authorities with which to oversee and regulate crypto non-security tokens and related intermediaries, I look forward to working with Congress to achieve that goal consistent with maintaining the regulation of crypto security tokens and related intermediaries at the SEC,” (our emphasis).
Chairman Gensler is continuing to make clear that the SEC intends to pursue oversight over tokens it sees as securities.