The SEC chairman Gary Gensler is set to testify in front of the US House of Representatives Committee on Financial Services on September 27, and his answers could give us a glimpse into how the SEC may treat the crypto industry under his leadership. Here are some of the things to expect from the testimony.
Potential Crypto Discussion Topics During the Testimony
SEC Chairman Gary Gensler will likely discuss several topics related to cryptocurrencies and the crypto industry during his testimony in front of the House Committee on Financial Services today.
The SEC Chairman had initially testified before the Senate Banking Committee on September 12. While crypto topics were discussed on a relatively small scale in the Senate hearing, Gensler mentioned in his statement that the crypto industry is full of fraud and abuse and needs to be regulated.
Now, with the next testimony scheduled to take place on September 27, 2023, at 10 AM Eastern Standard Time, it is expected that Gensler will reiterate his position concerning cryptocurrencies.
Gensler’s testimony, which is to be read at the hearing called ‘Oversight of the Securities and Exchange Commission,’ suggests that the crypto asset securities market should fall under the SEC’s jurisdiction.
According to him, most crypto tokens meet the Congress investment contract test. As a result, crypto brokers, dealers, and exchanges should also be subject to the same rules. “It follows that most crypto intermediaries have to comply with securities laws as well,” the testimony read.
Gensler will also likely avoid directly addressing the SEC’s ongoing lawsuit against Ripple Labs and its XRP cryptocurrency during his testimony. Gensler states in the testimony that; “While I’m happy to discuss the SEC’s work, I will not be able to comment on any active, ongoing litigation.”
On the other hand, Ripple’s CEO Brad Garlinghouse has recently added another attorney to Ripple’s team in the ongoing legal battle, which most believe will end in a settlement.
Crypto Regulation On The Horizon?
The SEC currently has limited power over cryptocurrencies, decentralized finance (DeFi), NFTs, and the whole crypto industry in general. However, new laws could expand the SEC’s oversight, though that may be an uphill battle in Congress.
The regulator has always made clear that regulations of cryptocurrencies are on the horizon. But even with its limited power over the industry, it has prompted the SEC to file various lawsuits targeting crypto exchanges like Binance.US and Coinbase on unregistered securities.
While speaking at the Securities Enforcement Forum Central 2023, David Hirsch, head of the agency’s crypto unit, hinted at more similar lawsuits against crypto companies.
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