The U.S. Securities and Exchange Commission’s (SEC) Investor Advisory Committee (IAC) submitted its opinion on crypto asset regulation to the SEC on Thursday. The committee was established under Section 911 of the Dodd-Frank Act to advise securities regulators on regulatory priorities.
In a letter to SEC Chairman Gary Gensler, IAC Chairman Christopher Mirabile and Vice Chairman Leslie Van Buskirk explained that the statement they submitted was “the consensus of the members of the IAC.”
“We believe that nearly all, if not all, cryptographic tokens are securities and that they, as well as the platforms and custodians on which they are traded, are subject to securities laws. Federal securities to protect investors.
Gensler also believes that, with the exception of Bitcoin, all crypto tokens are securities. He has repeatedly urged cryptocurrency trading and lending platforms to register with the SEC.
“Many investors have recently suffered significant losses from investing in crypto assets. These losses are estimated to total more than $2 trillion,” the IAC letter detailed.
The committee further noted that many high-profile crypto companies have filed for bankruptcy or are on the verge of bankruptcy, while others face civil and criminal charges. The letter added that encrypted assets “also suffer from significant levels of fraud and abuse” and that “the semi-anonymous and borderless nature of encrypted transactions makes them ideal for a variety of illicit activities such as money laundering and tax evasion.”
The IAC said it called on the SEC to “continue to exercise its authority over cryptoassets that are securities in an aggressive manner” and to “make cryptoasset-related enforcement a priority.” wrote:
“The SEC should continue to take aggressive enforcement action against companies that violate federal securities laws in the crypto space, including issuers, custodians, and unregistered platforms that offer investment transactions in crypto assets.”
Additionally, the IAC has recommended that the SEC “seek additional appropriate allocations from Congress, as necessary, to adequately oversee the crypto securities industry.”
Finally, the advisory committee urges the SEC to continue providing guidance on crypto assets, noting that regulators should educate investors about crypto risks and conduct due diligence on crypto assets, broker-dealers, and investment advisors to ensure appropriate regulatory standards.
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