SEC Chairman Gensler warns against new bill regulating cryptocurrencies

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has called on lawmakers to reject the “21st Century Financial Innovation and Technology Act,” a bill that seeks to establish a new legal structure covering digital currencies. The bill will determine which authorities will regulate digital assets. Gensler, however, disagrees with this, believing that the act poses a threat to applicable law and exposes investors to greater risk.

He stressed that under the current legal framework, investment contracts fall within the definition of securities and are therefore subject to the jurisdiction of the SEC and its investor protection rules.

Additionally, the bill will allow issuers of cryptocurrency investment contracts to self-declare their products as digital goods, with the SEC only having 60 days to challenge it. Gensler, who is overseeing the development of stringent measures to regulate the crypto space, cites several cases of fraud, bankruptcy and failures in the industry.

While the bill’s fate remains unknown, it was proposed at a time when the SEC was showing signs of approving spot ETFs.

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