Gensler: Crypto firms know exactly how to register, they just don’t want to
SEC Chair Gary Gensler defended his agency’s recent enforcement actions against Binance and Coinbase and issued a stark warning to any other businesses operating in the space: Comply, or you can expect a lawsuit, too.
Gensler did not mince his words during a virtual appearance at the 2023 Global Exchange and Fintech Conference Thursday, demanding that crypto firms follow existing laws. There is no need for further congressional action, as many in the space have called for, he said.
“It’s the law of the land,” he said, defending the SEC’s ability to oversee crypto markets.
Crypto companies have no excuse to not be operating within the rules, Gensler added, dismissing any claims that companies are unable to comply under existing laws.
“We’ve issued a reopening release that reiterated the applicability of existing rules to platforms that trade crypto assets securities, including so-called DeFi systems, that’s already the law. That’s already the rules,” Gensler said. “Not liking the law, not liking the rules is different than not hearing it or not getting it.”
There is no ‘regulatory clarity’ needed, Gensler added, arguing that issuers and broker-dealers and exchanges should know exactly how to comply.
Read more: Gary Gensler Is a National Disgrace: It’s Time to Rein Him In
The SEC head also doubled-down on his long-time stance that crypto markets are ripe for manipulation and fraud.
“We’ve also seen numerous companies before and after FTX blow themselves up, hurting countless investors in their way, hundreds of thousands, and sometimes millions around the globe,” Gensler said. “The crypto securities markets should not be allowed to undermine the well-earned trust of public capital markets.”
Days after his agency announced aggressive charges against exchanges Binance and Coinbase, Gensler firmly stood by the lawsuits, alleging the exchanges explicitly and knowingly violated securities laws.
“Working alongside law enforcement partners in 10 states, we charge Coinbase for never properly registering the offer and sale of its staking program,” Gensler said.
Binance faces similar registration and securities offering violations, but the SEC also alleges the exchange commingled client assets and manipulated markets, Gensler added, citing complaints released Monday.
Companies are “seeking a bunch of meetings with the SEC during which you’re unwilling to make the changes needed to comply with the securities laws,” Gensler said, possibly referring to recent statements from Coinbase and Robinhood stating they have attempted to engage with the SEC but have been unable to register.
On the day Coinbase’s charges were announced, the exchange’s chief legal officer, Paul Grewal, appeared before the House Agriculture Committee to face questions on crypto market regulation.
“I am still digesting the complaint that was served today,” Grewal said during the hearing.
“What I can speak to, in much greater detail, are the many, many interactions we’ve had with the SEC, going back not just months, but several years,” Grewal said, adding that the exchange has spoken with SEC staffers dozens of times.
It’s not an issue of inadequate guidelines, Gensler countered on Thursday, the exchanges simply do not want to do what they are told.
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