Earlier this morning, the Securities and Exchange Commission (SEC) issued a statement denying the petition for rulemaking commenced almost two years ago by Coinbase (NASDAQ:COIN), the largest digital asset exchange in the US.
SEC Chair Gary Gensler declared, “… To the extent that crypto assets are offered and sold in the form of an investment contract, and to the extent that entities intermediate transactions in crypto asset securities, the federal securities laws apply.”
SEC Commissioners Hester Peirce and Mark Uyeda, both selected by Republicans, issued a joint statement following the denial.
The Commissioners said:
“We acknowledge that the Commission has broad discretion to set the timing and priorities of its rulemaking agenda. In our view, the Petition raises issues presented by new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator. Any exploration of these issues should include public roundtables, concept releases, and requests for comment, which would afford us the opportunity to hear from a wide range of market participants and other interested parties. Then, using what has been learned, the Commission could issue guidance or engage in rulemaking as needed.
The public benefits from open conversations about how new products and services can be offered within a sensible regulatory framework to meet the needs of our fellow Americans. We hope that interested persons continue to posit specific rule changes, guidance, and exemptions that would form a useful basis for the crypto industry to continue its development within the United States. While we are disappointed that the Commission is not hosting these important conversations, we will have an open ear for conversations that others host and the ideas that emerge from those conversations.”
As far as the SEC is concerned, at least under the guidance of Chair Gensler, all digital assets are securities and will be treated thusly. Perhaps with the exception of Bitcoin. At least until Congress steps in and creates a statutory structure that differs from the Gensler-controlled Commission.
