SEC's Gensler Roars: The U.S. Has The Dollar, No More Crypto Needed

Securities and Exchange Commission (SEC) Chair Gary Gensler said the U.S. does not require additional digital currencies amidst ongoing legal action by the SEC against prominent crypto exchanges Binance BNB/USD and Coinbase Global Inc. COIN for purportedly operating unauthorized securities exchanges.

Gensler confronted the allegations of legal ambiguity in his approach to cryptocurrencies during a conversation with CNBC on Tuesday.

He hinted at resemblances between the SEC's action against Binance's CEO Changpeng Zhao and the pending legal case against Sam Bankman-Fried, the founder of FTX FTT/USD.

"There's no need for more digital currency — the U.S. dollar is already a digital currency," Gensler remarked.

"Throughout history, we have not observed a need for societies or the public to have multiple methods of value transfer," he added.

The SEC filed lawsuits against Binance on Monday, followed by Coinbase on Tuesday, alleging these platforms offered regulated securities services, including brokerage and clearing.

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In the legal battle, Gensler aims to demonstrate that the myriad of tokens available for trading on these prominent crypto platforms should have been registered with the SEC as they bear similarities to investment contracts, rather than simply being payment methods.

"All we need to demonstrate is that one of these tokens qualifies as a security, and thus, they should be properly registered," he explained.

Gensler dismissed the argument that crypto firms are faced with ambiguous regulatory enforcement, maintaining that securities law has been clear for many years.

He asserted, "It is imperative for these intermediaries to comply with the regulations."

He also implicated Binance affiliate Sigma Chain for "inflating volumes and distorting numbers due to the lack of controls," implying parallels to the case against Bankman-Fried, who currently awaits trial on fraud charges, which he denies.

While the SEC's suit doesn't level fraud allegations against Zhao, it does seek civil penalties and a permanent prohibition on Zhao from serving as an officer or director of any securities issuer.

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Photo: Third Way Think Tank via Flickr Creative Commons