- SEC chairman Gary Gensler reiterated that there is a need to regulate digital asset exchanges more closely.
- Highlighting last week’s volatility, Senator Elizabeth Warren stated that there could be risks posed to investors.
- Coinbase continues to be under fire as the exchange was accused of listing dozens of tokens that could be securities.
The Securities & Exchange Commission (SEC) chairman, Gary Gensler, appeared before the Senate Banking Committee to provide testimony on the regulator’s work. One of the major topics discussed was the cryptocurrency market.
Coinbase under fire as SEC battle continues
Gensler’s prepared remarks highlighted the need to regulate cryptocurrency exchanges more closely. Appearing before the Senate Banking Committee, he further suggested that cryptocurrency projects and exchanges should have a discussion with the agency.
The SEC chair believes that dozens to hundreds of tokens on crypto exchanges could be securities, unlike Bitcoin, the leading digital asset regulators believe is a commodity.
Senator Elizabeth Warren (D-Ma) added that last week’s flash crash seen in the crypto markets and volatility demonstrates the need to regulate digital asset exchanges. She explained that while cryptocurrencies have claimed to be a solution to financial inclusion, she criticized those claims.
Further referring to last week’s price plunge, she highlighted that $400 billion in market value just disappeared. In a scenario where an investor wishes to withdraw money amid the volatility, major crypto exchanges, including Coinbase, face temporary connectivity issues.
Singling out Coinbase, Gensler responded to Warren, adding that the exchange did not have to register as a securities exchange even though dozens of coins listed could be securities.
The statement from the SEC boss that Coinbase could be selling securities without a registered license with the agency comes just after a week that the exchange was sued by the agency for its lending product.
The securities regulator stated that Coinbase’s planned Lend program, which allows users to earn interest on crypto assets on the platform, could be involving securities but failed to give an explanation.
While Bitcoin and Ethereum have been pointed out not to fall under securities regulation, it appears that the agency considers that many other tokens fall into a grey area. The SEC has yet to clarify which coins could be deemed as securities and provide a transparent process for identifying a token’s legal status.
Senator Pat Toomey (R-Pa) responded in frustration during the hearing, responding to Gensler’s statement stating that he is concerned about how the SEC has not provided a sufficient definition on how it would apply the Howey Test, a test used to identify whether an investment is a security.
Toomey further pointed out that stablecoins would not fit the definition of a security since stablecoins do not provide a “likely expectation of a profit,” as stated in the Howest test.
While Coinbase has not made a comment on Gensler’s remarks, the exchange has previously delisted XRP in light of the SEC’s legal battle against Ripple Labs.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Ripple holders' profit taking hits a 19-month high as XRP price shoots up by 42%
XRP price has performed beyond expectations and has marked a multi-month high, restoring confidence in its investors. These holders have also made the most of the situation and turned to sell, which could backfire on the price action soon.
Decentraland Price Forecast: What to expect from MANA as Metaverse Fashion Week kicks off

Decentraland price (MANA) has identified critical support on day one of the Metaverse Fashion Week. The token is trading horizontally on the four-hour timeframe as bulls push to break above a descending trendline.
Ethereum devs confirm withdrawals to begin on April 12; Here's what to expect from ETH price

Ethereum is on the verge of bringing about one of the biggest upgrades to the blockchain since the Merge. The arrival of withdrawals has been anticipated for a long time now, however, it may not be as lucrative for Ethereum price as one might expect.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Market woes threaten bullish potential, XRP is undeterred

Bitcoin has reclaimed above $27,000, but increasing market volatility threatens the leg up. Ethereum faces critical resistance at $1,819 as investor sentiment suggests liquidity issues. Ripple reaches multi-month highs amid lawsuit-related optimism.
Bitcoin: Should you trust this BTC sell signal or wait for $34,000?

Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state.