The post SEC’s Gensler Avoids Token vs Securities Debate, McHenry Fumes appeared on BitcoinEthereumNews.com.

During a Financial Services Committee oversight hearing, Chairman Patrick McHenry challenged U.S. Securities and Exchange Commission Chairman Gary Gensler on the agency’s regulatory approach to crypto, including the inconsistent terminology used to describe them. McHenry, alongside other committee members, expressed concerns over the agency’s handling of crypto regulation. This particularly concerned the agency’s use of enforcement actions over clear guidance, which impacted companies like Ripple. Patrick McHenry Grills SEC Chair Gary Gensler McHenry highlighted the lack of clarity in the regulator’s approach to digital assets, pointing out that the agency uses various terms, such as crypto tokens, crypto securities, and digital asset securities, without a clear distinction between them. “Does the SEC differentiate between crypto tokens and tokenized securities?” McHenry asked. He added that “different terms and words have meaning” and emphasizing the confusion created by the agency’s inconsistent language. In response, Gensler stated that the terminology was less important than the economic reality of the asset. “It really goes down to a Supreme Court test, which is the law of the land, called the Howey test,” Gensler said. For context, the Howey test is the legal standard that determines whether a transaction qualifies as an investment contract under U.S. securities law. He stressed that “the labels matter less than what the economics are.” However, McHenry criticized the agency’s reliance on broad enforcement actions and questioned its unwillingness to clarify its regulatory stance. He said, “The laws are clear but what we’re seeing from the SEC is a lack of clarity. That’s what I’m trying to ask you about.” He also noted that the regulator’s ambiguous use of terminology raised questions about whether the agency was deliberately avoiding regulatory precision. In addition, he went on to label it as a “rogue agency” in the opening statement of the oversight hearing.…

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Filed under: News - @ September 24, 2024 4:22 pm