US SEC Chairman Reveals that Encrypted Assets and Transactions are Subject to Securities Laws Except for Bitcoin Spot Transactions

02/27/2023 07:38 • Metaverse Matters • 76 views

According to reports, Gary Gensler, chairman of the United States Securities Commission, reiterated in a recent interview with New York magazine (NYMAG) that all encrypted assets and all transactions are subject to the United States securities law, except for Bitcoin spot transactions.

Lawyer of Blockchain Association: Gensler’s remarks or opinions are not laws, and SEC has no right to supervise any of them

Analysis based on this information:

Gary Gensler, chairman of the United States Securities Commission, recently addressed the public in an interview with New York magazine (NYMAG), where he stated that all encrypted assets and transactions are subject to the US securities law, except for Bitcoin spot transactions.

This revelation is a significant move by the SEC, as it seeks to regulate an industry that has been largely unregulated for a long time. Gensler’s statement implies that any company or individual dealing in encrypted assets, such as Ethereum or Litecoin, must register with the SEC, and the SEC could scrutinize every aspect of their operations. This move could lead to increased compliance costs and regulation for market participants dealing in encrypted assets.

Gensler’s approach to the regulation of Bitcoin spot transactions is based on the premise that Bitcoin does not fulfill the definition of a securities asset. He has clarified that this is because Bitcoin’s supply is finite, and it is not backed by a company or financial instrument. Therefore, it is unlikely to give rise to claims against somebody else. Although Bitcoin spot transactions may not be subject to securities laws, non-US exchanges operating in a regulatory vacuum outside of US borders can also use Bitcoin, responsible third parties, and suitable investors.

The US SEC, under Gensler’s leadership, has already increased its involvement in the encrypted assets market. In April 2021, it issued a warning to investors about the risks of investing in Bitcoin futures and options, and it has also warned about a range of other cryptocurrency scams.

In summary, Gensler’s remarks about the regulation of encrypted assets (excluding Bitcoin spot transactions) illustrate a significant step in the SEC’s efforts to regulate the cryptocurrency industry. The SEC’s action is a move towards safeguarding investors and protecting the integrity of the financial system by introducing more stringent regulations that ensure transparency and accountability.

In conclusion, we anticipate that this move will lead to a more regulated and open cryptocurrency market, which will ultimately benefit both investors and cryptocurrency exchanges. To realize this goal fully, the SEC must continue to collaborate with market participants to develop a regulatory framework that strikes a balance between protecting investors and promoting innovation in the encrypted assets industry.

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