Forex in this article
• SEC Creates Dedicated Bureau of Crypto Assets
• Resources and expertise should be pooled in this way
• SEC Chief Gary Gensler favors treating cryptos as securities
The topic of cryptocurrencies is becoming increasingly important to the US Securities and Exchange Commission SEC. For this reason, the authority recently announced that the company’s corporate finance department DRP would be supplemented by two more new offices. From now on, there will also be an office for Crypto Assets and one for “Industrial Applications and Services”. DRP’s offices have long dealt with issuers’ corporate filing. So far there are seven such offices, which are now supplemented by the two new, branch-specific offices. The furnishing of the offices must be completed in the autumn of this year.
Gather resources and expertise when it comes to crypto
“Due to the recent growth in crypto-assets and the life science space, we have seen a need to provide greater and more specialized support in the DRP finance department and in the life science department. The establishment of these new offices will provide DRP’ an opportunity to increase focus in the areas of cryptoassets, financial institutions, life sciences and industrial applications and services and makes it easier for us to achieve our mission,” corporate finance director Renee Jones commented on the move in the SEC press release.
The new offices will enable the agency to better pool its resources and expertise to address “the unique and evolving challenges associated with cryptoasset filing verification.”
The new Office of Industrial Applications and Services will also report to the existing Office of Life Sciences and will henceforth deal with companies that are not from the pharmaceutical, biotech or medicine sectors but are associated with life sciences.
SEC chief Gary Gensler sees most crypto tokens as securities
With the establishment of an Office of Crypto Assets, the US Securities and Exchange Commission is taking another step forward in the direction of cryptocurrency regulation. SEC chief Gary Gensler recently emphasized again at a conference in Washington that the majority of digital currencies are securities: “Of the almost 10,000 tokens in the crypto market, in my opinion, the vast majority are securities,” The Block quotes Gensler. The SEC chief responded to criticism that the authority did not take a clear position on the regulation of cybercurrencies. The exchange expert says: “Without touching a token, most crypto-tokens represent an investment contract according to the Howey test”. The SEC uses the Howey test to determine whether a project or investment property is treated as a security. Gensler calls the few tokens that fail the Howey test non-security tokens. According to the SEC chief, these also include Bitcoin and Ethereum.
Special case stablecoins
For stablecoins, on the other hand, the following applies: “Stablecoins have similar characteristics to money market funds, other securities and bank deposits and can compete with them and raise important policy issues. Depending on their characteristics, for example, whether these instruments directly or indirectly pay interest to affiliated companies or like, what mechanisms are used to preserve value or how tokens are offered, sold and used in the crypto-ecosystem, it could be shares in a money market fund or some other form of security.” If this is the case, the providers must register with the stock exchange regulator and offer the necessary investor protection.
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