‘Navigating Uncharted Waters’: Barr Responds To Gensler’s Testimonial

U.S. Securities and Exchange Commission Chairman, Gary Gensler is scheduled to speak at September’s U.S. Senate Banking Committee GOP. On September 12, the policy head of the Chamber of Digital Commerce, Taylor Barr tweeted about Gensler’s testimony at the event regarding crypto.

🚨NEW: Ahead of tomorrow’s @BankingGOP hearing, @GaryGensler released the testimony he will give to the committee. Here’s what he will have to say about crypto tomorrow 👇 pic.twitter.com/jSGwaWvOi0

— Taylor Barr (@taylorjbarr) September 11, 2023

According to screenshots of the testimonial shared by Barr, most crypto tokens are subject to security laws. Henceforth, the majority of “crypto intermediaries,” have to operate in accordance to the security laws. However, Gensler has noted, “Given this industry’s wide-ranging non-compliance with the securities laws, it’s not surprising that we’ve seen many problems in these markets.”

In his tweet, Barr referenced Gensler’s point and emphasized that in the absence of well-defined guidelines and regulations, crypto companies are no longer dealing with a case of noncompliance; rather, navigating “uncharted waters.”

Additionally, Gensler highlighted that “a vast majority of crypto tokens,” pass for the investment contract test, created by Congress in 1946. However, the crypto community on Twitter is now questioning how a test created so far behind in the past, is qualified enough to “regulate a brand new asset class created 70 years later?”

On the other hand, crypto lawyer Mike Selig drew parallels between Gensler and former SEC chair Jay Clayton who asserted that every Initial Coin Offering (ICO) he encountered qualified as a security. “Similar rhetoric but different meaning,” cited Selig. As per the leader, while Clayton argued that ICOs are security, Gensler claims that the tokens themselves are securities. Furthermore, he added that Judge Torress disagreed with that perspective, as indicated in the ruling of the SEC versus Ripple lawsuit.

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