Gensler thinks it’s ‘too early’ to tell if Ripple ruling will lead to more crypto rules

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Securities and Exchange Commission Chairman Gary Gensler says it’s too early to determine whether the agency he leads will draft more crypto-specific rules following a split decision by federal judges in a high-profile enforcement case last week.

Gensler went on to note that the SEC proposed rule changes during his tenure that apply to digital assets.

There are rules on the books about what it means to be a stock exchange, broker and investment adviser, there are rules on the books, Gensler said in an online interview with Yahoo Finance.

We’ve also proposed or even adopted rules regarding brokers in this space called special purpose brokers, we’ve proposed rules regarding asset safeguarding, so we’ve made a part of that, but again, keep considering that, he continued.

Firms and crypto industry advocates have pushed back on some of these proposed rules, including applying the definition of an exchange to decentralized financial entities and making it clear that custodial rules also apply. to digital assets.

The last point became a point of attention after the high-profile bankruptcies of Celsius, Voyager Digital and FTX that tied up billions in customer assets because they were held by the companies rather than a third-party custodian. These clients are unlikely to see the full return of their assets at the end of these bankruptcy processes.

Gensler considers “DeFi” as “CeFi”

The financial market regulator has also questioned the concept of decentralized finance.

This area is actually quite centralized, Gensler said, arguing that decentralized projects sometimes have individuals with the title of CEO or CTO, and assets are often owned by fewer than 100 people. Finance tends towards a certain centralization.

The investing public comes first, that’s how our securities laws were first written, companies also raising funds in the markets, and really protecting them and also protecting the integrity of the markets, a he added.

I cannot comment on “ongoing” disputes

Gensler declined to comment directly on the Ripple case, citing ongoing litigation. Along with the possibility of an appeal of the split decision, which saw the judge side with the SEC on Ripples’ sales to institutional investors, but with the company on whether bid sales to the indiscriminate constituted securities violations, the SEC also has active enforcement cases against the United States. crypto giant Coinbase and global trading leader Binance.

The SEC Chairman also balked when asked what he thought of House of Representatives legislation to change existing digital asset rules to create a clear path for a security asset to become a commodity, as well as giving the Commodity Futures Trading Commission more power in spot markets.

We are interviewed by members of Congress, both in the House and in the Senate, and we generally give our comments to them directly rather than through on-air interviews, Gensler said. I will save our comments for any bill for members who ask us directly.

2023 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.

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