All cryptocurrencies will be regulated. Or else.
That was the clear and direct message delivered by Gary Gensler, the chair of the United States Securities and Exchange Commission, in a webcast with The Washington Post on Tuesday.
According to Gensler, there is no doubt that digital tokens meet the definition of securities and are subject to federal registration and disclosure rules. In a hint to regulatory “sandboxes,” he urged DeFi entrepreneurs to work with the commission to ensure compliance with tax, anti-money-laundering, and securities laws.
“We have robust authority at the SEC and we will use it,” Gensler said. “It would be better if the platforms that are trading securities, that have lending products or staking products, come in and let’s figure out how to get them within the perimeter.”
In addition, Gensler stated that his team is working closely with authorities from the US Department of the Treasury and banking supervision agencies to investigate stablecoins. Gensler compared these DeFi ecosystem staples to “poker chips at the casino gaming tables” of the Wild West.
Working under Treasury Secretary Janet Yellen’s direction, Gensler is exploring whether to seek congressional assistance in regulating stablecoins, a warning that new legislation may be required
Gensler’s threats are sure to enrage an industry already roiled by a flurry of measures. On Monday, Coinbase dropped its proposal to provide an interest-rate-paying product called Lend after the Securities and Exchange Commission informed the listed firm that it will sue to prevent the unlawful sale of an unregistered asset. The SEC is apparently examining Uniswap, and The Defiant reported earlier this month that the agency is launching a wide-ranging investigation of the entire DeFi sector.
Ryan Selkis, the outspoken CEO of Messari, a crypto data intelligence company, was so enraged by the Feds’ actions on Monday that he promised to run for the United States Senate. On Tuesday, he riffed on the SEC’s image for being horribly behind the times in terms of technology.