Crypto firms have had ongoing discussions with the US Securities and Exchange Commission (SEC), with the agency classifying most of these conversations as constructive. However, SEC Chair Gary Gensler emphasized the need for these firms to be compliant with existing securities laws. He spoke to CNBC Squawk Box just after the SEC announced charges against major US-based crypto exchange Coinbase for not being registered as an exchange, broker, or clearing agency.
Gensler pointed out that the industry’s business model often relies on noncompliance, likening it to a “catch us if you can” situation. According to him, the/crypto industry has held discussions with dozens of companies, but the focus now is on getting their business models in line with existing regulations.
The SEC has recently initiated various legal actions against crypto firms, a notable example being Binance and its CEO Changpeng Zhao, due to multiple charges. The regulator’s stance on cryptocurrencies classifying them as securities has pushed for exchanges to register with the SEC. Gensler asserted that the agency is prepared to work with the industry in achieving compliance.
On the other hand, when asked about the value behind cryptocurrencies, Gensler argued that the necessity for more digital currencies is unfounded. He explained that the world already has digital currencies in the form of fiat money, such as the US dollar, euro, and yen. These existing digital currencies pose a question about the true underlying value of cryptocurrencies and the need for full disclosure in the industry.
Many crypto exchanges are now facing civil charges by the SEC and other regulatory bodies. One of the most high-profile cases is that of FTX, whose CEO was accused of fraud late last year. This highlights the importance of transparency and compliance in the rapidly evolving crypto industry.
In summary, crypto firms need to navigate the balance between constructive discussions with regulatory bodies and ensuring their business models align with existing securities laws. The SEC and other regulators are ready to work with the industry to ensure compliance, but the onus falls on these companies to make the necessary adjustments. Furthermore, the ongoing debate on the true value of cryptocurrencies underscores the need for comprehensive and truthful disclosures to protect investors and maintain trust in the industry.
Source: Cryptonews
