Just recently, the U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler shone some light on how cryptocurrencies under security-based swaps are regulated.
Gensler began by saying that there are initiatives by some platforms to offer crypto tokens and other products with pricing based on the value of securities and operate like derivatives.
The chairman stressed that the securities law applies to the platforms within the finance space — decentralized or centralized.
Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.
Gary Gensler, Chairman of the SEC
Gensler further said that the products under security-based swaps are implicated by the securities law as well, which includes the trade reporting rules.
This means that any offer or sale to retail participants are required to be registered under the Securities Act of 1933 and effected on a national securities exchange.
So far, the commission has taken around 75 enforcement actions against companies and individuals within the crypto industry. Gensler said there are still other companies in violation of securities law.