Gary Gensler: Cryptocurrency is unlikely to become mainstream currency and no regulatory framework is needed

U.S. SEC Chairman Gary Gensler was asked about the agency's attitude toward digital assets at an event at the New York University School of Law. Gensler stood his ground on whether the 1940s Supreme Court ruling (referring to the Howey test) should be applied to cryptocurrency regulation. He said: "It's the law of the land, and I did it when I was sworn in, but it also protects investors. At the heart of securities law is a fundamental concept - you all can decide what you want to invest in." Gensler said it could also be green energy or artificial intelligence, but either way, disclosure is necessary. On Wednesday, Gensler also pointed out fraud in the crypto industry, citing a report from the U.S. Federal Bureau of Investigation (FBI) last month, which showed that crypto-related losses increased by 45% last year since 2022. He also said: "With all due respect, the leading figures in the field in 2022 are either in prison or awaiting extradition." Gensler was also asked whether it would be better to create a regulatory framework for digital assets, which he said already exists. “Just because people don’t like the law doesn’t mean there isn’t a law,” Gensler added. A law student also asked Gensler about the SEC’s view on the term crypto-asset securities and whether the agency should be more clear about its position. The SEC said in its recently amended complaint that when the agency refers to crypto-asset securities, it is not referring to the crypto-asset itself, but to the full set of contracts, expectations, and understandings surrounding the sale of such assets. The agency added that it “regrets any confusion.” Gensler said the SEC has been clear for years, including during the tenure of former SEC Chairman Jay Clayton, “and since then, the (SEC) has been clear with a consistent voice, and so have the courts.” Another student asked what would happen to the utility of tokens if they were compliant with the SEC’s regulations. Gensler said the SEC is “neutral” and that investors can decide on utility. He also noted that tokens are unlikely to be a currency, “It’s unlikely that these things will be money, it has to show its value through disclosure and use.” (The Block)