Despite several recent court setbacks, United States Securities and Exchange Commission Chairman Gary Gensler remains adamant that his agency should rule on crypto. The SEC lost to both Grayscale and Ripple in the last two months. Which has been seen as a big setback for the agency. However, Gensler still believes that crypto assets are actually securities and should be regulated by his agency. He will give the same argument in the Senate hearing also. The Senate hearing is being held regarding the SEC's oversight on certain matters.
Gensler still stands by his argument and believes that almost all crypto assets meet the Howey Test. Therefore all crypto assets are securities. Actually, the Howey Test is a legal test that determines whether an asset or transaction can be considered a security or not. Given that most crypto tokens are subject to securities laws, they must comply with SEC laws. However, the SEC's biggest defeat in this matter has been in the Ripple case where Judge Analisa Torres ruled partially in favor of Ripple and said that the sale of XRP tokens did not violate federal securities law. But Gensler is still adamant on his argument and is refusing to accept the court's decision. On August 29, the SEC suffered a second major defeat against Grayscale due to the rejection of its request to convert the over-the-counter Bitcoin Trust into a Bitcoin Exchange Traded Fund (ETF). In the ruling, the judge declared that the SEC's denial of Grayscale's request was simply arbitrary on the part of the SEC. These high-profile SEC losses appear to have inspired the appeal of LBRY, the blockchain-based payments network that was found guilty of violating securities laws in July.
Gensler intends to talk about two rule proposals on custody and exchange definitions that could impact cryptocurrency firms as well as recent enforcement actions. Gensler is adamant about maintaining compliance with security regulations in the crypto industry. While Gary Gensler has doubled down on crypto regulation efforts, a group of crypto and blockchain firms have formed the Texas Crypto Advocacy Group to create clear legislation.
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