Crypto Legislation Could Undermine Market Regulations, Gensler Says
SEC Chairman says recent proposal could impact broader $100 trillion capital market
WASHINGTON—Securities and Exchange Commission Chairman Gary Gensler expressed concern Tuesday that efforts in Congress to write legislation for the cryptocurrency industry could compromise regulations that govern the broader capital markets.
Asked about a bill introduced last week by Sens. Cynthia Lummis (R., Wyo.) and Kirsten Gillibrand (D., N.Y.), Mr. Gensler initially demurred, saying he would prefer to discuss the proposed legislation with the senators. But he then suggested that legislative changes targeting cryptocurrencies could have implications for stock exchanges or mutual funds.
“We don’t want to undermine the protections we have in a $100 trillion capital market,” Mr. Gensler said at The Wall Street Journal’s CFO Network Summit. “Like behaviors should have like treatment.”
WASHINGTON—Securities and Exchange Commission Chairman Gary Gensler expressed concern Tuesday that efforts in Congress to write legislation for the cryptocurrency industry could compromise regulations that govern the broader capital markets.
Asked about a bill introduced last week by Sens. Cynthia Lummis (R., Wyo.) and Kirsten Gillibrand (D., N.Y.), Mr. Gensler initially demurred, saying he would prefer to discuss the proposed legislation with the senators. But he then suggested that legislative changes targeting cryptocurrencies could have implications for stock exchanges or mutual funds.
“We don’t want to undermine the protections we have in a $100 trillion capital market,” Mr. Gensler said at The Wall Street Journal’s CFO Network Summit. “Like behaviors should have like treatment.”
“We’re not looking to extend our jurisdiction,” Mr. Gensler said. “But these tokens are being offered to the public, and the public is hoping for a better future. That’s the characteristics of an investment contract,” a type of security.
Mr. Gensler’s remarks contrast with those of his counterpart at the SEC’s sister regulator, the Commodity Futures Trading Commission, which would gain significant authority under the Lummis-Gillibrand bill.
At an event last week, CFTC Chairman Rostin Behnam said the proposed legislation “does a very good job” of clarifying the distinction between securities and non-securities in the crypto market and in empowering the CFTC to police the latter category of assets.