SEC Chair Gensler Warns Crypto Exchanges: Compliance is a Must!

• SEC Chair Gary Gensler defends the recent crackdown on crypto exchanges, arguing they were warned.
• He criticized them for failing to register and comply with securities laws, depriving investors of protections.
• Gensler suggested some exchanges sought meetings with the agency but were unwilling to make changes to comply.

SEC Cracks Down on Crypto Exchanges

The Securities and Exchange Commission (SEC) recently announced a crackdown on crypto exchanges, including Binance and Coinbase, for their failure to register and comply with securities laws. SEC Chair Gary Gensler defended this action, arguing that the exchanges had been warned about their conduct.

Gensler Dismisses „Fair Notice“ Claims

Gensler dismissed claims from the exchanges that they lacked “fair notice” that their conduct could have been illegal. Instead, he argued that they made a calculated economic decision not to comply with the security laws in order to deprive investors of critical protections. He also addressed claims by Coinbase and Robinhood that they tried to comply but failed, suggesting that compliance was possible if they had taken the necessary steps.

Leaked Chat Logs

To back up his statement further, Gensler cited leaked chat logs from a former Binance Compliance Lead which stated: “We are operating as a fking unlicensed securities exchange in the USA bro” Further emphasizing his point he said: “Again these crypto entities know the rules.“

SEC’s View of Crypto Assets

Gensler highlighted the need for crypto security issuers to register their investment contracts before offering them publicly. He reiterated his view that most crypto assets are securities as their value depends on efforts of others rather than solely on market forces of supply and demand.

Implications for Crypto Market

The implications of this stance by Gensler have significant implications for crypto intermediaries and will reshape the overall cryptocurrency landscape going forward. The future regulation under Genslers‘ leadership could play an important role in regulating cryptocurrencies around world markets and protecting investors interests in digital assets like Bitcoin and Ethereum..