October 16, 2021

Volume XI, Number 289

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SEC Chair Gary Gensler Provides Remarks on Crypto Assets at the Aspen Security Forum

On August 3, 2021, SEC Chair Gary Gensler provided remarks on the current state of U.S. crypto asset regulation at the Aspen Security Forum. While acknowledging the contributions crypto assets and blockchain technology have made to financial and monetary innovation, Mr. Gensler noted the immediate need for investor protection in light of the hype, fraud, scams and abuses in the crypto asset space that have resulted in harm to investors.

Mr. Gensler remarked on the protections that exiting U.S. securities laws provide, particularly with respect to initial coin offerings, many of which have been subject to SEC enforcement action as offerings of unregistered securities. Nevertheless, he warned that significant investor protection gaps exist with respect to foreign crypto trading platforms and decentralized finance platforms that purport to prohibit U.S. investors, but through which unregulated trading by U.S. investors is possible. He expressed further concerns about “stablecoins,” crypto assets whose value is pegged to a reference asset, typically a currency such as the U.S. dollar, noting the potential use of such assets to evade public policy goals such as anti-money laundering, tax compliance and sanctions, and suggesting that some stablecoins may need to be registered both as securities and as investment companies.

Although brief, Mr. Gensler’s remarks about investment vehicles providing exposure to crypto assets were significant. He noted that products providing exposure to crypto assets have been around for several years and that there are a number of mutual funds that invest in Bitcoin futures that trade on the Chicago Mercantile Exchange (CME). In light of the significant investor protections provided by the Investment Company Act, Mr. Gensler stated that he looked forward to the staff’s review of filings to offer cryptocurrency-related ETFs, particularly those investing in CME Bitcoin futures.

Mr. Gensler concluded his remarks by stressing that, although some aspects of crypto asset regulation are clear, further Congressional action is needed to close regulatory gaps with respect to crypto transactions, products and platforms. He noted the importance of such crypto asset regulation not only to protect investors but also to encourage innovation and protect national security.

Mr. Gensler’s remarks are available here.

© 2021 Vedder PriceNational Law Review, Volume XI, Number 252
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About this Author

John Marten Investment Attorney Vedder Price Law FIrm
Shareholder

John S. Marten, a Shareholder in the Chicago office of Vedder Price, has substantial experience representing clients in the investment management industry.

As a member of the firm’s Investment Services group, Mr. Marten counsels clients on a wide variety of matters involving the application of the federal securities laws to investment companies, investment advisers and broker-dealers. He has significant experience counseling investment company clients with respect to new products and was recently involved in the creation of two mutual funds...

(312) 609 7753
Nathaniel Segal Investment Attorney Vedder Price Law Firm
Counsel

Nathaniel Segal is counsel at Vedder Price and a member of the Investment Services group. He focuses his practice on investment companies and investment advisers in connection with the organization and operation of investment products and services, including traditional mutual funds, closed-end investment companies (including interval funds and listed closed-end funds), variable insurance products and registered hedge funds, as well as mutual funds utilizing complex hedging and absolute return strategies. Mr. Segal has experience in conducting transactional due diligence...

(312) 609 7747
Jacob Tiedt,Vedder Price law firm investment services attorney
Shareholder

Jacob C. Tiedt is a Shareholder at Vedder Price and a member of the Investment Services group.

Mr. Tiedt’s practice includes the representation of registered mutual funds, closed-end funds and exchange-traded funds; private funds; investment advisers; and other financial institutions on a broad range of regulatory, governance and compliance matters. Mr. Tiedt regularly counsels clients on matters relating to SEC registration, disclosure and compliance; shareholder solicitation; NYSE, Nasdaq and FINRA regulation; corporate governance; and board administration. Mr....

312-609-7697
John M. Sanders Investment Lawyer Vedder Price
Associate

John M. Sanders is an Associate at Vedder Price and a member of the firm's Investment Services group.

Mr. Sanders focuses on advising clients on mutual funds, private placements, sale transactions and regulatory issues.

While in law school, Mr. Sanders was a judicial extern for the Honorable David J. Novak, U.S. District Court for the Eastern District of Virginia and a law clerk with the Baltimore City State’s Attorney’s Office. He also served as Lead Articles Editor for the William & Mary Law Review.

...
(202) 312 3332
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