Gary Gensler: SEC Has No Plans to Ban Cryptocurrencies

The U.S. Securities and Exchange Commission (SEC) has no plans to ban cryptocurrencies; that is a prerogative of Congress. Gary Gensler, the regulator’s head, said this.

He commented on a question from Representative Ted Budd about potentially following China’s lead on digital assets.

“Our approach is completely different. The question is how we embed this space [cryptocurrencies] into existing investor and consumer protection frameworks. How should we engage with other regulators to facilitate the Treasury’s work in combating money laundering and tax administration,” he said.

During his testimony before Congress, Gensler noted that the majority of cryptocurrencies, in his view, meet the status of investment contracts, while stablecoins pose a threat to financial stability.

“Stablecoins worth $125 billion are like poker chips in a casino. If the market continues to rise tenfold, as it did in the last year, the segment will pose a systemic risk to the economy,” he stressed.

At the same time, the head of the SEC dodged a direct question about the interpretation of Bitcoin and Ethereum.

“I will not discuss specific tokens. Securities laws are clear. If you raise funds, if investors expect profits from the efforts of others, then this falls under regulation,” he explained.

Gensler also touched on the regulation of exchanges and DeFi.

“Even DeFi platforms have a centralized protocol. I believe that here too we can achieve the maximum degree of public policy,” he added.

Earlier in September, Federal Reserve Chair Jerome Powell said there were no plans to ban cryptocurrencies. At the same time, the agency head allowed for bringing some of them under the regulatory framework.

Earlier, Gensler confirmed the conditions under which the SEC would approve a Bitcoin-ETF.

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