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SEC Chair Gensler Defends Crypto Crackdown

 |  April 19, 2023

Securities and Exchange Commission (SEC) Chairman Gary Gensler was in the hot seat Tuesday (April 18), and so was the cryptocurrency industry’s legally viable, go-forward future in the United States.

During more than four hours of testimony before the House Financial Services Committee in a hearing titled, “Oversight of the Securities and Exchange Commission,” the regulatory chair staunchly defended his agency’s rulemaking and ongoing enforcement of the cryptocurrency industry in the face of at-times combative criticism from lawmakers.

Gensler repeated his mantra that “nothing about the crypto markets is incompatible with the securities laws,” emphasizing that in his view, “the vast majority” of crypto tokens are securities.

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“Given that most crypto tokens are securities, it follows that many crypto intermediaries are transacting in securities and have to register with the SEC,” he wrote in his prepared remarks, adding that the crypto industry currently entails “risks and conflicts the commission does not allow in any other marketplace.”

Over the past six years, regulators have taken enforcement action against more than 100 crypto defendants. Gensler has chaired the SEC since 2021.

“It’s the law; it’s not a choice,” the SEC chair said. “Calling yourself a DeFi platform, for instance, is not an excuse to defy the securities laws.”