in his latest witness SEC Chairman Gary Gensler made a statement during the U.S. Senate Conference on Banking, Housing and Urban Affairs that sparked speculation in the cryptocurrency community.
While the SEC is known for its tough stance on the crypto industry, Gensler’s comments gave cryptocurrency proponents hope, especially when it comes to the regulation of crypto assets and the potential approval of a Bitcoin spot exchange-traded fund (ETF). .
Gensler’s remarks on cryptocurrency raise questions, hopes
SEC Chairman Gensler emphasized the need to prioritize investor protection and ensure that the crypto-asset securities market complies with securities laws. Gensler emphasized that the legal definition of securities established in the 1930s includes the term “investment contract,” a term that likely covers most crypto tokens.
This means that most crypto tokens are subject to securities laws, and intermediaries such as exchanges, brokers, and clearing houses are obliged to comply with these laws by registering or seeking exemptions.
However, despite the SEC’s long-standing position, report On July 13, Bitcoinist judge Analissa Torres ruled in favor of Ripple Labs.
The SEC claimed that Ripple raised more than $1.3 billion by selling XRP to investors, classifying it as a security. Nonetheless, the court found that programmatic XRP sales did not meet the standards of investment contracts because they lacked the economic reality of institutional sales.
This ruling supports the notion that there is no reasonable expectation of profit from the efforts of others.
Despite this recent development, the SEC’s stance on the industry’s “widespread failure to comply” with securities laws remains unchanged. Gensler reiterated the need for enforcement action to hold violators accountable and safeguard the interests of investors.
In addition, the U.S. Securities and Exchange Commission is actively involved in rulemaking efforts to establish a regulatory framework for the cryptocurrency market. A reopening version has been released reaffirming that existing rules apply to platforms participating in the trading of crypto-asset securities, including decentralized finance (DeFi) systems.
Additionally, Gensler discussed proposed updates to the Investment Adviser Custody Rules, which are designed to cover all crypto assets and enhance protections provided by qualified custodians.
Gensler hints at possible shift to Bitcoin spot ETF?
Gensler’s comments on the Bitcoin spot ETF raised expectations of particular interest from the crypto community.
He revealed that in addition to the famous Grayscale application, the SEC is reviewing multiple spot Bitcoin ETF applications and is awaiting staff recommendations. The announcement comes after a previous court ruling criticized the SEC for favoring futures ETFs over Bitcoin spot ETFs, suggesting Gensler’s SEC may be more willing to consider spot ETFs.
Despite the recent intensification of the crackdown on cryptocurrencies, Gensler’s comments offer a glimmer of hope for the cryptocurrency community.
His recognition of the need for regulatory transparency and the SEC’s efforts to update rules and review Bitcoin spot ETF applications signal a potential shift in the SEC’s approach. While the SEC’s primary focus remains investor protection and regulatory compliance, Gensler’s statement demonstrates a willingness to consider industry innovation and work toward clearer rules.
It should be noted that the crackdown on digital assets has not stopped, and the SEC’s regulatory actions will continue. However, Gensler’s testimony provided a more nuanced perspective and demonstrated an underlying desire to balance investor protection with promoting innovation in the crypto industry.
Featured image from iStock, chart from TradingView.com