SEC Chair Gensler Debates How Securities Laws Apply to Crypto Tokens

On CNBC on Monday, SEC Chair Gary Gensler highlighted cryptocurrency regulation and the agency’s regulatory plan for 2022. The chairman illuminated that, in general, “If you are raising money from the public, and the public is in anticipation of profit based upon that promoter, sponsor, that group’s efforts — that’s within the securities laws, and it’s within the securities laws because Congress painted with a broad brush.” He expounded: “They want to protect you — the investing public — so that you have the proper information, or what’s called full and fair information, and protect you against fraud and scammers and the like.” Investments labeled as a token, according to Gensler, ‘are still probably, perhaps a security.’ While new ways to invest, such as crypto tokens and Special Purpose Acquisition Companies (SPACs), are ‘interesting,’ the SEC chairman highlighted: “Our role at the SEC is to ensure that the public still gets basic protection.” Gensler further elucidated: “What is kind of old and really important is this basic idea that if you raise money from the public and the public is thinking about a profit, you have got to give them basic disclosures and everything.” He was also questioned about the rise in cryptocurrency-based crowdfunding. He reiterated his refusal to comment on any specific project, the chairman detailed: “Crypto tokens, I will call them, are raising money from the public, and are they sharing with t...