Gary Gensler Gets Rare Support On Crypto From Former SEC Chair

Crypto News: Former U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton became a subject of criticism on Friday with his support to Gary Gensler over crypto token classification. While the bigwigs of crypto market pinned their hopes on gaining an edge over regulatory agencies through legal proceedings, Clayton said courts are after all not efficient in clearing the air around securities Vs commodities differentiation. He made the comments at the back of Gensler’s failure to answer specifically on whether Ethereum (ETH) is a security or commodity.

During the recent House Financial Services Committee hearing, Gary Gensler dodged the question on explaining how crypto firms should comply with the laws. The Committee Chair Patrick McHenry came down heavily against Gensler’s stance that existing securities laws are already compatible with the crypto market.

Jay Clayton Supports Gensler

Speaking about the state of the crypto market and the debate around regulation, Clayton said securities can eventually become commodities but currently many cryptocurrencies appear to be securities. He explained that these assets now give a first mover advantage to early investors in crypto projects, hence acting as securities. During a discussion on CNBC on Friday, he also said,

“The courts are not an efficient place to resolve classification issues around securities and commodities.”

His comments attracted criticism from the crypto community, which was buoyed by the Gensler’s grilling on lack of clarity during the Congressional hearing. Meanwhile, the US regulators are facing fresh wave of angst after the European Union’s voting to pass the Markets in Crypto-Assets (MiCA) regulation. MiCA is touted as the first comprehensive rules for digital crypto asset service providers.