Gary Gensler is regarded in some quarters to be hostile to the U.S. crypto community. Previously, the Securities and Exchange Commission (SEC) chair has talked passionately about the demerits of cryptocurrencies and the strong need to regulate its industry.
Since FTX’s collapse, Gensler has been extra aggressive toward crypto even if Congress has been slow in creating a crypto framework. Recently, the SEC has charged a number of crypto enterprises for violation of securities laws. Many crypto insiders now complain that Gensler’s meddling is affecting overseas crypto businesses. But some argue that Gensler’s aggressiveness will help streamline the high-risk industry.
The epicenter of this battle is the cryptocurrency debate: Should crypto be considered as securities or commodities? Securities are governed by Gensler’s SEC, reputed for more stringent regulations than the Commodities Futures Trading Commission. Many crypto leaders argue that a lot of cryptocurrencies are commodities; hence, they prefer to be presided over by the CFTC.
Gensler thinks most crypto should be securities. He has charged crypto companies such as Gemini and Kraken using his framework for failing to register their products with the SEC. Gensler has also issued a warning to other crypto companies with similar programs saying that the move puts everyone in the marketplace on alert that they need to work at being compliant.
Genesis caved in after the sinking of FTX and has an investor debt of $900 million. Last year, crypto protocol Anchor promised investors a 20% yield if they pumped money into Terra-Luna; the company crashed in May. Gensler targeted the founders with securities fraud. He wrote saying how some crypto companies would avoid compliance with the securities laws.
Other government agencies apart from SEC are critical of the industry. The Federal Reserve, Federal Deposit Insurance and Office of the Comptroller issued a joint statement warning banks against stablecoin liquidity risks. Similarly, the White House warned about crypto’s associated risks. This means that crypto enterprises — miners, lenders and exchangers alike — could become extremely jittery transacting in the United States for fear of rising regulatory action. Many are now restricting U.S. investors but enticing offshore ones.
This week crypto supporters tweeted that the SEC shut down a $75 million metaverse fund managed by Everyrealm. The company’s asset manager, Jesse Stein, disputed this generalization during a TIME interview. He said, “The SEC did not do anything to force us to close.” He added that the company welcomes Gensler’s approach and is working toward being compliant.
All these aggressive enforcement actions in the absence of a clear regulatory structure could have far-reaching ramifications for the trajectory of the industry, and you can bet that companies such as Riot Blockchain Inc. (NASDAQ: RIOT) could be tracking these developments in order to see how they could potentially impact long-term plans.
CryptoCurrencyWire (“CCW”) is a financial news and content distribution company that provides (1) access to a network of wire services via InvestorWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets, (3) enhanced press release services to ensure maximum impact, (4) social media distribution via IBN (InvestorBrandNetwork) to nearly 2 million followers, and (5) a full array of corporate communications solutions As a multifaceted organization with an extensive team of contributing journalists and writers, CCW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CCW brings its clients unparalleled visibility, recognition and brand awareness. CCW is where news, content and information about crypto converge.
To receive instant SMS alerts from CryptoCurrencyWire, text “CRYPTO” to 844-397-5787 (U.S. Mobile Phones Only)
For more information, please visit https://www.cryptocurrencywire.com
CryptoCurrencyWire is part of the InvestorBrandNetwork.