Key Takeaways
- The SEC does not have the authority or the intention to prohibit the use of cryptocurrency.
- Congress made the decision to ban cryptocurrency.
- According to Gensler, the problem with the US public is that not overseeing the Safe Harbor and implementing investor protection will harm people.
- The SEC will collaborate with bank regulators to protect investors and consumers.
Gary Gensler stated that the US SEC does not have the authority or the intention to prohibit cryptocurrency in the United States.
Gensler, the AgencyHearing's head, stated on Tuesday during a hearing of the House Committee on Financial Services that the prohibition of digital coins is beyond the Agency's jurisdiction and can only be decided by Congress.
He stated that the Commission only needs to collaborate with bank administrators and other relevant stakeholders to ensure that investors and consumers are protected, and that the Treasury Agency works to prevent money laundering and ensure tax compliance.
He also stated that many virtual coins met the criteria for being considered an investment contract or even a security; he also stated that it is critical to bring the currency to the investor protection department of the country's Securities and Exchange Commission.
Gensler also stated that the Commission is concerned about the financial stability issues that stablecoins may cause.
Representative Patrick McHenry responded to the Commission's action and position on digital assets under Gensler's leadership during the Hearing; he blamed the Head of SEC for neglecting the Commission's habit of looking into opinions concerning lawmaking and processes.
Gensler responded that the SEC operates in accordance with the law that governs its administration.
McHenry also mentioned the current SEC chairman's comment to the Committee in 2019; while lecturing at the Massachusetts Institute of Technology, he stated how Gensler condemned the SEC's previous action in classifying Bitcoin and Ethereum as commodities.
When asked for his thoughts on the matter, Gensler stated that he would not venture into virtual currency but saw the Security law as clear.
The hearing took place on the same day that McHenry proposed an explanation for the Digital Token Act of 2021, which exemplifies the Safe Harbor proposal presented by pro-crypto SEC commissioner Hester Peirce in 2020.
McHenry inquired of Gensler whether he had reviewed the proposal. Gensler avoided answering the question directly by stating that he spoke with Peirce about her thoughts on the Potential Safe Harbor. He believes that the problem with the American public is that not overseeing this and instituting investor protection will harm people.
Do you think the US SEC Chairman's claim will lead to widespread adoption of Cryptocurrency, or will Congress effectively ban it?
