The U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler, has called on lawmakers to reject the “Financial Innovation and Technology for the 21st Century Act,” a bill that seeks to establish a new legal structure to embrace digital currencies. The bill will define which authorities will regulate digital assets. However, Gensler disagrees with it, as he thinks the bill poses a threat to current laws and also exposes investors to more risks.
He pointed out that under the present legal framework, investment contracts fall under the definition of securities, thus within the SEC’s jurisdictions and its rules on investor protection.
Additionally, the bill will allow issuers of crypto investment contracts to self-proclaim their products as digital commodities, with the SEC having only 60 days to contest. Gensler, who oversees the development of strict measures to govern the crypto space, cites several instances of fraud, bankruptcy, and failure in the industry.
Although the fate of the bill remains unknown, it has been proposed at a time when the SEC showed signs of approving spot ether ETFs.
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