A former CFTC chairman, Gary Gensler said that ICOs should be considered as securities. Gary said this while commenting on ICOs at the Institutional Crypto: Laying the Foundation conference in New York.
At the event, a program sponsored in part by the Bloomberg LP, the parent company of Bloomberg News, Gary Gensler a former CFTC chairman mentioned that most cryptocurrency sold through initial coin offerings should be considered securities.
If cryptocurrencies are considered as securities as Gary stated, this will make them fall under the regulatory purview of the United States securities and exchange commission, SEC. This will bring the issuers of coin to term with specific laws, register with SEC, and reveal some specific information such as a description of the property of the organization or a financial statement.
Also, his opinion was sought on whether the blockchain sector should be regulated at the conference. Gensler responded that there is a need to be technology neutral, while further stating that there is also a need for investors protection to be ensured within certain blockchain application such as cryptocurrencies. He said while further emphasizing that cryptocurrencies such as bitcoin BTC require more protection and probably more protection than even the oil market.
On future developments of the blockchain sector and regulations, Gensler said that there should be more of oversight – traffic light and speed limits. Also, Gensler emphasized that blockchain and regulations will still coexist, but it will take some years to sort it through and get the balance right.
Notably, lack of appropriate regulations has been a significant impediment to the full acceptance and adoption of cryptocurrency. The US SEC has failed to approve Bitcoin ETF while citing the absence of regulations as a reason for rejection among others.
One of the significant quality absent in the blockchain and cryptocurrency space is the lack of security and a developer ecosystem. Gensler emphasis on security reveals the need to make the ecosystem safer for the comfort of investors and traders.
This opinion tallies with the thought of Vitalik Buterin, who said recently that the major assignment of developers is to make blockchain application more suitable for access and usage of cryptocurrency investors and traders.
This comes to term with the thought of SEC Senior Advisor for Digital Assets and Innovation, Valerie A. Szczepanik, who stated that “if you want [the crypto] industry to flourish, protection of investors should be at the forefront.”