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Crypto Firms Chose to Disregard Rules, Declares SEC Chair

The US Securities and Exchange Commission (SEC) chair has refuted claims that the agency is thwarting the crypto industry, insisting that these firms knowingly violated regulations.

Gary Gensler
Gary Gensler

SEC Chair's Stance on Crypto Regulation

The US Securities and Exchange Commission (SEC) Chair, Gary Gensler, robustly responded to criticism that the SEC hinders the crypto industry. He stated on Thursday that many crypto firms had made a conscious economic decision to violate the commission's regulations.

The Security Status of Crypto Tokens

While speaking at a Piper Sandler conference in New York, Gensler reiterated his belief that a significant number of crypto tokens pass the test of being a security. Therefore, they should be registered with the SEC. This implies that most crypto exchanges are also expected to adhere to securities laws, he further explained.

The Myth of 'Fair Notice' in Crypto Violations

Gensler expressed his skepticism regarding claims from crypto asset market participants who say they didn't have 'fair notice' that their actions could be illegal. "Don't believe it," he said, asserting that many had consciously decided to risk legal action as part of their business strategy.

Crypto Industry's Reaction to Recent SEC Actions

The crypto industry has recently hit back at Gensler after the SEC filed lawsuits against two of the world's largest crypto exchanges, Coinbase and Binance. These companies allegedly breached securities laws by not registering their operations with the SEC.

Coinbase CEO's Rebuttal to SEC Chair

Coinbase's Chief Executive, Brian Armstrong, who has been vocal in his criticism of the SEC and has led the push for clearer crypto regulations in Washington, responded to Gensler's comments on Wednesday. He labeled Gensler as an "outlier" among Washington policymakers and accused him of having an "icy" attitude when Coinbase approached him about registration.