SEC Chairman Gary Gensler said that most altcoins and tokens are securities, and the law is clear on this.
Gary Gensler says crypto law is clear on this
The SEC Chairman believes that most cryptocurrencies promoted in the investment space are securities. The US regulator is known for its enforcement of regulatory actions in the cryptocurrency market. The institution has been doing this for a while. This is because the American Congress has a hard time classifying altcoins categorically as securities or commodities.
The SEC Chairman stated in his appearance on CNBC’s Squawk Box on Oct. 3, implying that most altcoins are actually securities and can be regulated using securities laws:
The law is clear on this. Based on the facts and circumstances, I believe most of these tokens are securities. When a group of entrepreneurs raise money from the public and expect a profit, they need to be exposed.
"The law is clear on this. I believe based on the facts and circumstances most of these tokens are securities," says SEC Chair @GaryGensler on #crypto. "When a group of entrepreneurs is raising money from the public and they're anticipating a profit, they need disclosure." pic.twitter.com/UMuNJRZrfG
— Squawk Box (@SquawkCNBC) October 3, 2022
Gensler made these comments while speaking on an episode of Squawk Box on Monday. The SEC recently accused social media phenomenon Kim Kardashian of marketing the EthereumMax token (EMAX). According to the accusation, the SEC emphasized that Kardashian hid the fee she received from the EthereumMax team for marketing.
SEC clings to misleading altcoin marketing
Kardashian received $250,000 for the promotional message at the time. As a result, the SEC demanded $1.26 million from Kardashian, which it agreed to pay. $1.26 million, including the $260K Kardashian received for promoting EMAX and $1 million in penalties.
As we reported as Kriptokoin.com, Kim Kardashian made ads about EMAX on social media in June 2021. On September 7, 2021, the Chairman of the UK Financial Conduct Authority (FCA) criticized Kim Kardashian for marketing anonymous cryptocurrencies. Later, Gensler also included statements about the Kardashian incident in a tweet today:
The SEC today accused Kim Kardashian of illegally launching a crypto security. This example is a reminder that when celebrities/phenomena support investment opponents, including cryptocurrencies, that doesn’t mean that investment products are right for all investors.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
— Gary Gensler (@GaryGensler) October 3, 2022
Gensler’s remarks also say that the US is lagging behind other countries in crypto as there are no clear digital laws. However, he also responds to top crypto personalities like Ripple CEO and others. Gensler had previously allowed the CFTC to assume oversight of cryptocurrencies. However, he stated that his support would come only if cryptos, which he classified as securities, were allowed to regulate. The CFTC said the US has 70 years of experience understanding what is a security or commodity.
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