The Securities and Exchange Commission (SEC), under Gary Gensler’s leadership, is working harder to extend regulation to the cryptocurrency business. The official stated he has a “flexible” way for tokens to register with the agency in his most recent testimony before the U.S. Senate, but his earlier comments showing his scepticism toward cryptocurrencies suggest crypto industry players may have a different opinion on the SEC’s strategy.
The most recent move comes just after Gensler stated earlier this month in a speech that many crypto tokens are securities in his opinion, which means that many “crypto intermediaries” are transacting in securities and as a result, must register with the SEC.
Gensler testified before the U.S. Committee on Banking, Housing, and Urban Affairs that the majority of the almost 10,000 tokens available on the cryptocurrency market are securities. In order to register and regulate their tokens as securities, when necessary, the SEC staff will work closely with entrepreneurs
The SEC staff will also work with companies that have been active in other markets with strong regulations and wish to enter the cryptocurrency sector. Such conventional financial facilitators have shown a desire to offer services to cryptocurrency investors while abiding by tested regulations for investor protection.
Gensler added that the SEC might step up its collaboration with traditional financial players looking to enter the cryptocurrency space, potentially boosting institutional adoption.
Following the crash of the terraUSD (UST) stablecoin in May 2022, the SEC also started looking into the operations of several crypto exchanges to see if they had enough measures in place to avoid insider trading.