Crypto industry needs investor protection regulations, such as custody standards says SEC Chair Gary Gensler

“Crypto lawyer Jake Chervinsky said SEC can't call crypto as securities due to bias”

Over the weekend, there was chatter in the crypto community about a possible declaration by SEC Chair Gary Gensler that all cryptocurrencies except Bitcoin would be categorized as "securities." The SEC has been keeping a close eye on digital assets, especially following the collapse of the FTX crypto exchange. The agency seems to be ramping up its efforts to regulate the crypto market.

In a recent interview with New York Magazine, author Ankush Khardori recounted his conversation with Gensler, in which the SEC Chair expressed his view that all crypto transactions fall under SEC jurisdiction, except for spot Bitcoin transactions. Gensler argued that every other crypto project, apart from Bitcoin, has a website with entrepreneurs setting up their legal entities in offshore tax havens. He believes that these tokens are securities, as investors are hoping to make a profit based on a group's performance. Therefore, he thinks that legally, these transactions should fall under securities and within SEC’s jurisdiction.

However, not everyone agrees with Gensler's stance. Crypto lawyer Jake Chervinsky, for example, thinks that the SEC does not have the authority to regulate digital assets. He argues that the SEC must prove its case in court for each asset, one at a time, and that Gensler's opinion is not the law.

Interestingly, some Bitcoin supporters see this as an opportunity to promote the adoption of Bitcoin. They believe that if the SEC only considers Bitcoin as a legitimate digital asset, more people will want to use it instead of other cryptocurrencies.

So, while the crypto world debates the possible categorization of digital assets, we'll have to wait and see what the future holds for the market.

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