• US Securities and Exchange Commission (US SEC) Chair Gary Gensler stated in an interview that “everything other than bitcoin” is a security, and the SEC has the necessary legal tools to regulate them.
• Gensler emphasized that apart from Bitcoin spot transactions and crypto used in the sale or purchase of goods and services, every other crypto transaction fall under the SEC’s jurisdiction.
• The SEC has been increasingly going after crypto firms and entities that violated their regulations, including recent lawsuits against Terraform Labs, Paxos, and Kraken. Meanwhile, the Philippines SEC is also making moves to regulate cryptocurrency and digital assets.

The Chairperson of the United States Securities and Exchange Commission (US SEC) Gary Gensler expressed in an interview that “Everything other than bitcoin” are securities and the SEC have the legal tools it needs to regulate them.

US SEC Chairman: Bitcoin is fundamentally different

In an interview, Gensler noted that aside from Bitcoin spot transactions and the use of cryptocurrencies in purchase or sale of goods or services, every other crypto transaction already fall under the SEC’s jurisdiction. Essentially, Gensler highlighted that Bitcoin is fundamentally different from other crypto projects. Bitcoin is the largest and leading cryptocurrency.

“They might drop their tokens overseas at first and contend or pretend that it’s going to take six months before they come back to the U.S…But at the core, these tokens are securities because there’s a group in the middle and the public is anticipating profits based on that group,” he explained.

ConsenSys co-founder: No chance for Eth to be considered security

On the other hand, ConsenSys founder and Ethereum co-founder Joseph Lubin recently stated that there is little chance of the United States’ financial regulators calling cryptocurrency Ethereum (ETH) a security following the network’s transition to a proof-of-stake (PoS) model. (Read more: ConsenSys: No chance for SEC to classify ETH as Security)

Moreover, Gensler added that the “roadway” for crypto firms that are not registered with the SEC is “getting shorter.” Accordingly, it can be remembered that recently the US SEC have been actively going after crypto firms and entities that violated their regulations.

Recent US SEC actions

Recently, the US SEC sued Terraform Labs and its co-founder and CEO Do Kwon for “orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.” (Read more: Do Kwon Cashes Out $80 Million Monthly: US SEC)

Blockchain and trust company Paxos is also currently facing a lawsuit filed by the SEC for issuing their stable coin Pax Dollar (USDP) and Binance USD (BUSD) tokens which are “violating investor protection laws.” (Read more: US SEC to Sue Crypto Trust Paxos Over Binance Stablecoin BUSD)

Cryptocurrency exchange Kraken also settled with the commission for its charge after it failed to register its offer and sale of “crypto asset staking-as-a-service program” with the SEC. The settlement comes with the exchange paying  $30 million in disgorgement, prejudgment interest and civil penalties and halting its staking activities. (Read more: Crypto Staking No More: Kraken Settles with US SEC Over Staking Program)

“The conflicts in these storefronts, we do not allow in traditional finance, we don’t allow in the securities markets, we don’t allow it in the commercial banking markets, and we don’t allow it in crypto because these storefronts are fundamentally and generally noncompliant with the securities laws as we know them,: he stated noting that “whether they call themselves lending or staking as a service or exchanges, they’re bringing together millions of customers.”

Genler then pointed out that he is “in a job where I’m supposed to be merit neutral in terms of what risk investors want to take…but not neutral towards the investor protection — the full, fair, and truthful disclosure you get when you’re investing in a security.”

SEC Philippines Actions

In the Philippines, local regulators are also making moves to properly address and regulate cryptocurrency and other digital assets.

Last month,  the SEC released a draft version of the implementing rules and regulations (IRR) of the Financial Products and Services Consumer Protection Law (Republic Act 11765) which will give the Commission the ability to impose stricter penalties on scammers and Ponzi schemes once implemented. (Read more: Does SEC Tag Crypto as Security Under the Financial Products and Services Consumer Protection Act?)

The Commission also aims to conduct joint research and capacity-building projects focusing on cryptocurrency and financial technology regulation with the University of the Philippines Law Center (UPLC) through the University of the Philippines Legal Center Research Program after both signed a memorandum of understanding (MoU). (Read more: SEC Partners with UP Law Center for Joint Research on Crypto, Fintech Regulations)

This article is published on BitPinas: Gensler: Everything Other than Bitcoin is a Security

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

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• Source: https://bitpinas.com/regulation/us-sec-chair-everything-other-than-bitcoin-is-a-security/