In a speech to American Bar Association, the US SEC chair Gary Gensler said cryptocurrencies whose prices depend on more traditional securities might fall under securities laws. Gary also wanted to harmonize such derivatives rules with similar ones already in place at the Commodity Futures Trading Commission.
Gary Gensler also emphasized that many platforms offer crypto tokens or similar products priced off securities. It must adhere to security laws even when they are offered on decentralized platforms.
“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides a synthetic exposure to underlying securities,” he said.
“These platforms – whether in the decentralized or centralized finance space – are implicated by the securities laws and must work within our securities regime.”
Gensler remarked that SEC will start writing “long overdue” rules for registrations and regulations of security-based swap execution facilities. The rules going live this fall will increase transparency and reduce risk in the derivatives market.
Gensler warned that his agency may bring future enforcement actions as well. He noted that “we’ve brought some cases involving the retail offering of securities-based swaps”.
This week, Binance also announced it would close its stock token offering service. Binance said, “we believe shifting our commercial focus to other product offerings will better serve our users”.
Since many firms affected by new SEC rules already operate under CFTC regulations,
Gensler considers pairing SEC rules and CFTC regime as an efficient approach.
