Gary Gensler: Cryptocurrencies are unlikely to become mainstream currencies, and there is no need to specifically create a regulatory framework

Gary Gensler, Chairman of the U.S. SEC, was asked about the agency's attitude towards digital assets at an event at New York University School of Law. When asked whether the Supreme Court ruling from the 1940s (referring to Howey Test) should be applied to cryptocurrency regulation, Gensler stood his ground. He said: "This is national law and I swore by it when I took office, but it also protects investors. The core of securities law is a basic concept - you can all decide what you want to invest in." Gensler said this could also be green energy or artificial intelligence, but disclosure is necessary regardless. On Wednesday, Gensler pointed out fraudulent activities in the crypto industry and cited a report last month from FBI showing that losses related to crypto increased by 45% since 2022. He added bluntly: "The leaders in this field are either in jail or awaiting extradition."

Gensler was also asked if creating a regulatory framework for digital assets would be better; he stated that such a framework already exists. "Just because people don't like this law doesn't mean there isn't one," added Gensler. A law student further questioned him on SEC's view on term 'crypto asset securities' and whether they should clarify their stance more clearly. In its recent revised complaint, SEC stated that when referring to 'crypto asset securities', it does not refer to crypto assets themselves but rather full contracts, expectations and understandings regarding sale of these assets; adding regretfully for any confusion caused.
Gensler noted that SEC has been clear over years including during tenure of former chairman Jay Clayton stating “Since then (SEC) has consistently made clear statements with consistent voice as have courts.” Another student asked what changes would occur if tokens complied with SEC regulations? To which he replied saying that SEC is neutral and investors can determine utility value while noting that tokens are unlikely to become a currency, "These things are unlikely to become currencies. They must show their value through disclosure and use."