Yesterday Gary Gensler (the SEC Chair) gave an interview to the Washington Post about Cryptocurrencies.
The transcript is available at [https://www.washingtonpost.com/washington-post-live/2021/09/21/transcript-path-forward-cryptocurrency-with-gary-gensler/](https://www.washingtonpost.com/washington-post-live/2021/09/21/transcript-path-forward-cryptocurrency-with-gary-gensler/)
Here are my takeaways from the interview:
1. Gensler doesn’t really think that the Evergrande fiasco will impact globally. (He didn’t quite say that, but certainly didn’t come across as very concerned by it)
2. The Public Company Accountancy Oversight Board (PCAOB) is responsible for public company auditor oversight. Worldwide, the only big jurisdictions that do not allow this oversight are China and Hong Kong. If they do not comply within 3 years, all 270 of those (big!) companies will no longer be able to trade in the USA! This will become very messy if it leads to USA companies being banned in China in a tit-for-tat battle. (ie, no more Apple, Boing, Ford, GM, Tesla in China)
3. Gensler is making a strong play to completely regulate crypto exchanges and lending platforms. He states that such platforms have hundreds or thousands of **securities** being traded. He includes tokens in this category. (this is fair enough I believe). However he also includes Stable Coins as being securities as well. I don’t know how he makes this leap (given that the [Howie Test](https://www.investopedia.com/terms/h/howey-test.asp) specifically includes the requirement of “reasonable expectation of profits”), but there you go. His angle is that the ability to lend out stable coins and earn interest constitutes making a profit. That is bullshit in my opinion. He says “These stable coins are acting almost like poker chips at the casino right now” and that the SEC will get “inside investor-consumer protection, inside the tax compliance and anti-money laundering and financial stability”
So, more regulation is coming. Most tokens will be classed as securities, and the companies that have promoted them in the USA without being registered with the SEC will be prosecuted.
Thank goodness that Bitcoin and Ether remain safe at this time.