The chairman of the U.S. Securities and Exchange Commission (SEC) is raising crypto eyebrows with a speech delivered before the non-profit learning organization Practicing Law Institute.
In his “Kennedy and Crypto” speech, Gary Gensler hints that the SEC will use existing securities laws to regulate crypto despite anticipation and calls for regulatory frameworks specific to digital assets.
“Investors, issuers, and our overall economy have benefited from those securities laws and the SEC’s engagement for nearly 90 years. That oversight should not change just because the issuance and trading of certain securities is based on a new technology.”
Gensler also quotes the first SEC chairman, Joseph Kennedy, as he urges crypto and traditional finance companies to comply with securities laws.
“For those who are starting up in this space now – either from traditional finance or as crypto-native companies – work with us on compliance from the beginning. It’s far less costly to do so from the outset.
As Joseph Kennedy put it, ‘No honest business need fear the SEC.’”
In response, Ripple general counsel Stuart Alderoty commented that the SEC’s approach to regulating crypto assets is akin to political power grabbing.
“Make no mistake, this is a political power grab (it’s not the law and it’s not good policy) and it’s at your expense.”
He also used another quote from Kennedy to convey his views.
“Another famous quote from Joseph Kennedy: ‘I wanted power. I thought money would give me power and so I made money, only to discover that it was politics–not money–that really gave a man power.’”
The SEC filed a suit against Ripple in 2020 over claims that the San Francisco-based company sold unregistered securities. As the legal battle continues, pro-Ripple lawyer Jeremy Hogan says that the SEC should give clarity on which crypto assets should be counted as securities.
In an article written for the Wall Street Journal, former SEC chair Jay Clayton also says that the US should establish regulatory clarity in the crypto space.
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