SEC Chair Gensler Insists Most Crypto Tokens Are Securities — Says ‘the Law Is Clear’

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has reiterated that most crypto tokens are securities, emphasizing that “the law is clear on this.” However, the Commodity Futures Trading Commission (CFTC) has asked Congress for authority over crypto spot markets and several bills have been introduced in Congress this year to provide the CFTC with the necessary authority.

SEC Chairman Gary Gensler on Crypto Regulation

The issue of which federal agency should regulate the crypto market has gained much attention recently. While the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has said that the majority of crypto tokens are securities and should fall under the purview of his agency, many people and lawmakers believe that it should be the Commodity Futures Trading Commission (CFTC) that regulates the crypto sector. Moreover, three bills have been introduced in Congress this year to make the CFTC the regulator of the crypto markets.

In an interview with CNBC Monday, Gensler responded to a question about who should regulate the crypto sector. The SEC chief explained:

Our agency is an agency that oversees this basic bargain. When a group of entrepreneurs is raising money from the public and the public is anticipating a profit, they need disclosure — full, fair, and truthful disclosure, and that’s the core bargain in our capital markets.

The SEC chairman continued: “You get to take the risk but the person raising money or the persons raising money has to disclose various information to you. That’s how our capital markets work best, and the SEC is very good at this and that’s what we do.” He emphasized:

The law is clear on this. I believe based on the facts and circumstances, most of these tokens are securities.

On Monday, at the Financial Stability Oversight Council (FSOC) meeting, presided by Treasury Secretary Janet Yellen, Gensler reiterated: “Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. Offers and sales of these crypto security tokens are covered by the securities laws. Given that most crypto tokens are securities, it follows that many crypto intermediaries are transacting in securities and have to register with the Securities and Exchange Commission in some capacity.”

Regarding the SEC collaborating with the CFTC, Gensler stressed:

To the extent that crypto intermediaries may need to one day register with both the…