SEC Chair Criticizes Crypto Firms that Avoid Registration
Commentary by Rachael Hashmall
SEC Chair Gary Gensler criticized "those who seek to reduce information available to investors," including crypto industry participants who attempt to avoid registration and required disclosure requirements.
In a speech at Columbia Law School, Chair Gensler described rules adopted in the past two years that require mandatory disclosure for market participants regarding climate, cybersecurity, SPACs and executive compensation. He argued that mandatory disclosure-based regimes (i) help protect investors, (ii) reduce information asymmetries, (iii) help in making more informed investment decisions and (iv) help issuers access the markets.
He asserted that "there still are those who would like to whittle away at the SEC’s disclosure regime. ...No registration means no mandatory disclosure. Many would agree that the crypto markets could use a little disinfectant."
Commentary
There is widespread agreement that tailored regulation could benefit the crypto markets, rather than the SEC’s continued theme of regulation by enforcement. The fact that no crypto firm has registered with the SEC could be taken as evidence that the SEC registration scheme, developed for ordinary equity and debt securities, is not workable as applied to crypto assets and crypto market participants. As the SEC continues to pursue enforcement actions against major crypto firms, many crypto companies and advocacy groups have called on the SEC to establish clear rules that are tailored to crypto. (See also related coverage.)
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