On Tuesday, SEC Chair Gary Gensler testified before the House Committee on Banking, Housing and Urban Affairs about the agency's oversight. The takeaways from the hearing drew responses from the general crypto community, as expected.
Eleanor Terrett, a Fox Business correspondent, offered some takeaways from the session, noting that cryptocurrency was only a minor fraction of the questioning compared to past House hearings, where it was a major focus.
Gensler also faced a barrage of criticism for the SEC's rulemaking pace and duration of comment periods.
Bloomberg analyst James Seyffart reacted by posting a screenshot of the crypto section of the SEC chair's testimony, saying, "Here's the crypto section of Gensler's written testimony for today. Basically says nothing. The final sentence is this: While I'm happy to discuss the SEC's work, I will not be able to comment on any active, ongoing litigation."
Crypto section in SEC's chair testimony
Per the document posted by James Seyffart, SEC Chair Gary Gensler remains adamant in his belief that crypto trading platforms should adhere to rigorous U.S. securities regulations. He also argues that the vast majority of crypto tokens will most likely pass the investment contract test.
Gensler also cited wide-ranging noncompliance with the securities laws in the crypto industry, which led to the agency's enforcement approach. The use of the newly coined term "crypto securities" also drew attention.
Going by Gensler's comment, the SEC seeks to bring DeFi under its jurisdiction, stating that the existing rules also apply to the cryptocurrency sector.
The SEC chair's testimony reads:
As I've previously said without prejudging any one token, the Vast majority of crypto tokens likely meet the investment contract test. Given that most crypto tokens are subject to securities laws, it follows that most crypto intermediaries have to comply with securities laws as well. Thus, we have brought a number of enforcement actions—some settled and some in litigation—to hold wrongdoers accountable and promote investor protection. The SEC has also addressed the crypto security markets through rulemaking. We issued a reopening release that reiterated the applicability of existing rules to platforms that trade crypto asset securities, including so-called defi systems.
The SEC chair, however, declined to comment on any active or ongoing litigation.