He added that the existing rules have been вЂњquite a benefit to investors and economic growth over the last 90 yearsвЂќ, referring to the Securities Act of 1933. вЂњWe donвЂ™t want our current stock exchanges, our current mutual funds, our current public companies to inadvertently, by the stroke of a pen, say: вЂYou know what, I want to be non-compliant as well. He also appeared to suggest that the change could provide a loophole for those who want to be outside of regulatory requirements. вЂњYouвЂ™ve got to make basic disclosures and not mislead them.вЂќ вЂњIf youвЂ™re raising money from the public, the publicвЂ™s anticipating a profit based on your entrepreneurial or other efforts,вЂќ Gensler said.

He suggested that cryptocurrencies have some properties in common with shares. Gensler said that the SECвЂ™s main goal was to вЂњcontinue to protect people in these basic bargainsвЂќ when it comes to investing. This would place most tokens under the jurisdiction of the CFTC. It takes the view that cryptocurrencies are вЂњancillary assetsвЂќ and generally presumed to be a commodity, unless the asset is a debt or gives the holder a right to profit-sharing. The bill, proposed by Senators Cynthia Lummis and Kirsten Gillibrand, tries to clear up this confusion by relying on the Howey test, an approach which stems from a 1946 Supreme Court decision. The dilemma over which agency should have authority over crypto comes down to the question of whether digital tokens are securities. вЂњWe donвЂ™t want to undermine the protections we have in a $100 trillion capital market,вЂќ Gensler said on Tuesday at a Wall Street Journal event, when asked about the bill. The bipartisan bill, called the Responsible Financial Innovation Act, would clarify the role of various regulators in regards to cryptocurrency and shift some responsibility for the sector from the SEC over to the Commodity Futures Trading Commission (CFTC).

Securities and Exchange Commission chairman Gary Gensler has expressed concerns that a proposed bill on how cryptocurrencies are regulated could weaken consumer protections.

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