Gensler Makes Impassioned Crypto Speech; House Republicans Seek His Removal

Gensler – speaks

In a speech before the Piper Sandler Global Exchange & Fintech Conference in Washington, D.C., Securities and Exchange Commission (SEC) Chair Gary Gensler gave perhaps his most prolonged defense of the his position on crypto and its oversight – which is especially relevant given last week’s enforcement actions against Binance and Coinbase.

On staking-as-a-service, which has been popularized on the Ethereum blockchain, he sees only a security: “It doesn’t matter what kind of assets investors put into a lending or staking-as-a-service platform-cash, gold, bitcoin, or anything else. It’s what the intermediary says that they are going to do with the assets that determines what protections are provided by the law. Customers invest their assets with the platform, which then onlends them or pools and stakes them, in each case promising a return. These are classic securities, irrespective of whether crypto is involved.” Read the speech.

Gensler – removal

Meanwhile, the partisan rancor amped just a tad in the House of Representatives as House Majority Whip Tom Emmer (R, MN) “joined” the introduction of Rep. Warren Davidson’s (R, OH) ‘SEC Stabilization Act’ which seeks to remove Chair Gensler and restructure the Securities and Exchange Commission (SEC). Emmer said in a statement that the new legislation aims to address the “long series of abuses that have been permitted under the current SEC structure.” Read it.

And, Davidson’s statement on Twitter cut to the chase: “U.S. capital markets must be protected from a tyrannical Chairman, including the current one. It’s time for real reform and to fire [Gary Gensler] as Chair of the SEC.”

get testimony – digital assets

Prepared testimony was made available yesterday for today’s 2 p.m. ET digital assets hearing, “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem,” by the House Financial Services Committee. Click a witness’s name to read their testimony:

Notably, Prometheum CEO Aaron Kaplan has been a late addition to the Witness list. His company is on the SEC’s side and has embraced that crypto tokens are securities. He writes, “There has been much discussion lately about the need for greater regulatory clarity for digital assets. The essential point at hand is not about more or less regulation or even new regulation, but rather the application of the existing regulatory frameworks to digital assets.

get testimony – SRO

What if there was self-regulatory organization (SRO) for cryptocurrency? National Futures Association CEO Thomas Kaplan frames it for Congress in his testimony: “For an SRO to operate effectively with the CFTC, two key features are necessary. First, Congress and/or the CFTC must adopt a requirement to mandate membership in the RFA for registrants. As apropos to the derivatives industry, the CFTC has rules requiring mandatory membership in an RFA, which ensures that NFA can discipline, and when appropriate, bar registrants that do not abide by NFA’s rules. Without mandatory membership, firms would be able to relinquish their NFA membership if they did not want to follow a rule or were being disciplined for failing to follow NFA’s rules. Second, effective government oversight is essential to self-regulation, and this oversight should cover all aspects of the SRO’s regulatory activity.” Read Kaplan’s testimony (PDF).

Robinhood crypto

Trading platform Robinhood announced yesterday that crypto trading volumes for May slumped badly.  The company said in a press release, “Trading Volumes in May were higher for equities and options and lower for crypto compared to April 2023. Equity Notional Trading Volumes were $49.4 billion (up 27%). Options Contracts Traded were 97.5 million (up 29%). Crypto Notional Trading Volumes were $2.1 billion (down 43%).

Just last week, Robinhood’s Chief Legal Compliance and Corporate Affairs Officer,  Dan Gallagher, testified in front of the House Agriculture Committee that his company had tried to “come in and register” its crypto operations with the SEC, but was largely ignored by the Commission. Read that one.

tokenized CFTC

The Commodity Futures Trading Commission (CFTC) announced that the next meeting of the Global Markets Advisory Committee (GMAC) will be July 17. A new Digital Asset Markets subcommittee will be part of the proceedings. Commissioner Caroline Pham, the committee’s sponsor, teased the event a press release saying, “The GMAC’s work is very timely given recent market events and news reports, which we will examine further through expert presentations and in-depth discussions during our anticipated July 17 meeting. We will, of course, look at tokenized asset markets, as well as Treasury market reform, and the upcoming requirements for swap block thresholds. I look forward to announcing further details soon.” Read it.

still more tips

The digital dollar’s bipartisan problem – Politico

As crypto burns, solo bitcoin miner wins BTC ‘lottery’ – Blockworks

eToro to Halt Polygon, Alogrand, Decentraland, and Dash Purchases for US Customer – Decrypt

Opinion: What the Reddit Boycott Has to Do With AI and Crypto – CoinDesk

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