On Wednesday, the chairman of the US SEC, Gary Gensler, who almost caused public outrage in the encryption industry, once again "fired" at the cryptocurrency in a public meeting. He told reporters,Tokens using staking protocols (i.e. proof-of-stake tokens) should be considered securities under US law。
“The investing public expects a return when they invest, expects to be able to get some kind of return on these tokens, whether they’re proof-of-stake tokens, investors expect a return, whether it’s 2%, 4% or 18%.” Gensler explained, “No matter what they’re promoting, what they’re putting in a protocol, locking their tokens into a protocol — usually a protocol that a small group of entrepreneurs and developers are developing,secondary title”
Regulatory bosses of the two parties disagree
Gensler made the remarks when asked to react to recent statements by Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam. Rostin Behnam reiterated at the time his and the CFTC’s view that Ethereum is a commodity.
Last week, during a Senate Agriculture Committee hearing, Rostin Behnam disagreed with SEC Chairman Gary Gensler’s previous statement that “all cryptocurrencies other than Bitcoin should be classified as securities.”
He believes that Ethereum and stablecoins (such as Tether) are commodities, not securities. Behnam also said he wants to work with the SEC on coordination opportunities, but the CFTC has yet to receive legal guidance on how to distinguish commodities from securities.
In a recent interview with New York magazine, Gensler insisted that he has a favorable opinion of the CFTC and would not speak negatively about it. It appears that Gensler's so-called "goodwill" has done little to bridge the gap between the two institutions.
It is worth mentioning that, despite disagreements with the CFTC, the SEC is not without "comrades." U.S. New York Attorney General Letitia James also filed a lawsuit against crypto exchange KuCoin in early March, accusing it of offering unregistered securities and commodities in violation of securities laws. The lawsuit is part of the "Unregistered Crypto Platforms Rectification Action" launched by New York state regulators.The lawsuit also alleges that ETH, LUNA, and UST are all securities。
Presumably everyone is familiar with the above remarks of Gensler - since he took charge of the SEC, he has made controversial remarks on cryptocurrencies N times.
In February, Gary Gensler discussed cryptocurrencies in an interview in which he claimed that “everything (cryptocurrencies) except Bitcoin” falls under the agency’s remit.
He added that other crypto projects "are securities because there is an intermediary group based on which the public is expected to make a profit," which is not the case with Bitcoin.
In response to this statement, Jake Chervinsky, chief policy officer of the Blockchain Association, a non-profit organization in the United States, refuted it. He tweeted that despite Gensler's claim to control the crypto space, his "opinion is not law." He added that “unless” the U.S. SEC “proves in court” its jurisdiction over each token “on a case-by-case basis,” it “lacks the authority to regulate any token.”
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Kraken becomes a "lesson from the past"
Last month, the SEC announced that Kraken, a cryptocurrency exchange, would "immediately" end its staking-as-a-service (staking-as-a-service) platform services to U.S. customers and pay a $30 million fine to the SEC to resolve the issue. Allegations against it of offering unregistered securities. Kraken's holding companies, Payward Ventures, Inc. and Payward Trading Ltd., will terminate staking services and programs, the SEC said. These projects have been offering staking services to the public since at least 2019.
Kraken said in a blog post that it will automatically release other assets other than Ethereum pledged by U.S. customers. The Ethereum pledge will be released after the Ethereum network Shanghai upgrade takes effect. US customers will not be able to stake new assets (including Ethereum), but non-US users will not be affected. So far, the two parties have reached a settlement.
Now that there is a precedent for Kraken, other peers have to be prepared. Gensler also previously warned: "Cryptocurrency companies should comply. If you want to provide cryptocurrency collateral, please come to the SEC. Other platforms should pay attention to Kraken's problems. We will use all available tools to encourage cryptocurrency companies to comply with the rules." .”
Companies like Kraken can offer investment contracts, but they must have full, reasonable and truthful disclosure, he noted. also,Gensler also compared the encrypted trading platform to a casino, which needs to split part of the token business;And pointed out that if this field wants to survive and succeed, it needs time-tested companies and laws to protect investors and make full, reasonable and true disclosures, and not to misappropriate customers' funds or put their hands in customers' pockets.
At the same time, the SEC is increasing its headcount and capacity to review, investigate, audit, inspect, and possibly prosecute securities law violations related to these new crypto products and trading activities. The additional staff will include regulators, investigators attorneys, fraud analysts and trial attorneys, focusing on investigations into violations of securities laws in the following areas: crypto asset offerings, exchanges, and lending and staking products, DeFi platforms, NFTs and stablecoins.
even so,Registering with the SEC does not mean that you have won the "golden medal for avoiding death"secondary title
Seeking Compliance or Going Overseas?
If cryptocurrency companies want to survive the recent regulatory wave in the United States, they may have to follow Gensler’s “advice” to seek compliance, otherwise they can only “survive with broken arms” like Kraken, or simply leave the US market , Looking for more friendly encryption centers around the world, such as Singapore, Hong Kong, China, etc. Things won’t be easy for local industry players, at least until crypto legislation in the U.S. is clear.
