\n<\/p>\n
Securities and Exchange Commission Chair Gary Gensler has once again compared crypto to securities, saying investors still lack the requisite information for buying and selling digital currencies.<\/p>\n
In an interview on Thursday with former Secretary of Commerce Penny Pritzker at the NYC Summit,<\/a> a conference for venture capitalists and tech founders, Gensler said that most digital tokens are similar to securities because the underlying companies or groups are run by entrepreneurs looking to attract public investors.<\/p>\n He added that crypto intermediaries should register with the agency.<\/p>\n \u201cI\u2019ve said, \u2018Come in, talk to us, help get the intermediaries registered\u2014the crypto exchanges, the crypto lending platforms, the crypto broker dealers, registered,\u2019\u201d he noted at the conference.<\/p>\n Gensler added that the SEC can use exemptive authority where possible to help tailor regulations.<\/p>\n \u201cThis field, crypto, is neither going to take off\u2014if you think it will\u2014unless you\u2019ve got some trust that the public can have in this field,\u201d he said.<\/p>\n In prepared remarks<\/a> before a separate Thursday event, organized by the Practising Law Institute, Gensler said the \u201cvast majority\u201d of cryptocurrencies are securities and crypto investors should get the same protections as those who are buying and selling stocks.<\/p>\n \u201cInvestors deserve disclosure to help them sort between the investments that they think will flourish and those that they think will flounder,\u201d he said.<\/p>\n Gensler also said that he will continue to apply the Howey Test, established by the Supreme Court in 1946, to dictate whether cryptocurrencies are securities. The Howey Test says an \u201cinvestment contract\u201d exists \u201cwhen there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others,\u201d according to the SEC<\/a>. If transactions qualify as investment contracts, they are considered securities.<\/p>\n The SEC chairman also said certain stablecoins may in some cases be defined as securities \u201cdepending on their attributes, such as whether these instruments pay interest, directly or indirectly, through affiliates or otherwise; what mechanisms are used to maintain value; or how the tokens are offered, sold, and used within the crypto ecosystem.\u201d<\/p>\n Gensler, who last year called the crypto industry the \u201cWild West,\u201d<\/a> added that crypto doesn\u2019t need any additional guidance, pointing to several examples of guidelines issued by the SEC\u2014including the DAO Report, <\/em>which found that tokens issued by the DAO virtual organization were securities<\/a>, and the Munchee Order, which led to California-based Munchee Inc. refunding $15 million<\/a> raised from a 2017 initial coin offering. He also cited \u201cdozens of enforcement actions\u201d as a way that the SEC has communicated guidelines.<\/p>\n \u201cNot liking the message,\u201d he said on Thursday, \u201cisn\u2019t the same thing as not receiving it.\u201d<\/p>\n<\/div>\n