Friday, June 2, 2023

SEC Chair Gensler Claims Lummis’ Crypto Bill Undermines TradFi

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The SEC Chair Gensler claims Lummis’ crypto bill undermines the existing broader market regulations as the battle between the regulatory watchdogs is heating up so let’s read more today in our latest cryptocurrency news.

The SEC Chair Gensler claims that the bill can undermine tradFi and expressed concerns that the new crypto legislation will undermine the existing broader market regulations and the reaction was quite expected from the policymaker that was fighting hard for his agency to be responsible for regulating crypto and treat the majority of the assets the same as securities. The new bill was introduced on June 7 by Senators Cynthia Lummis and Kirsten Gillibrand who proposed to make the CFTC the main regulator of the industry which was supported by the industry executives and the pro-innovation policymakers hoping it will result in many assets being classified as commodities like gold rather than securities like company stocks.

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Gary Gensler said that crypto should be treated the same as traditional banking and fiannce markets:

“We don’t want to undermine the protections we have in a $100 trillion capital market. Like behaviors should have like treatment.”

The Lummis-Gillibrand bill aims to create a complete regulatory framework for crypto assets headed by the CFTC but it is unlikely to pass Congress because of the presence of a number of anti-crypto lawmakers like Senator Elizabeth Warren. The bill proposed new concepts to the 90-year-old laws which will allow for some token issuers bigger leeway than the public corporations face. Gensler said the agency was not trying to extend jurisdictions but reaffirmed his position that cryptos are securities and added:

“These tokens are being offered to the public, and the public is hoping for a better future. That’s the characteristics of an investment contract.”

CFTC Chief Rostin Behnam approved the Lummis-Gillibrand bill and said that it addresses the distinction quite well between commodities and securities. Ripple general counselor Stu Alderoty trashed the SEC and accused the agency of trying to bully and bankrupt the crypto innovation in the US via threats and enforcement actions:

“Like a hammer wanting everything to be a nail, the SEC is keeping everything murky so it can argue every crypto is a security.”

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