SEC Chairman Gary Gensler suggests: Some stablecoins are securities and must comply with securities laws.

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has suggested that tokenized stocks and stablecoins backed by securities may be considered as securities.

Gary Gensler stated in an interview with the American Bar Association that some trading platforms offer currencies and derivative products that correspond to securities pricing, and the prices of these cryptocurrencies may be subject to securities laws.

He mentioned that whether it is stock tokens, securities-backed stable value tokens, or any other virtual products that provide exposure to underlying securities, these platforms, whether in decentralized or centralized financial domains, must comply with securities laws and "operate within our securities regime."

SEC refers to stock token trading as cryptocurrencies that represent a composite of traditional stocks (such as Apple or Tesla). These tokens are typically created on the Ethereum blockchain.

Gary Gensler sternly warned that the SEC may take legal action, stating, "We've already brought cases involving retail securities-based swaps."

In 2019, the SEC fined the cryptocurrency wallet Abra. Abra offered tokenized versions of Apple, Google, and Netflix stocks to U.S. customers in mid-2019. After facing fines from the SEC and CFTC, it ceased this business in July 2020.

Most recently, Binance faced pressure and eventually had to retreat and shut down its stock token offering business.

Not only does Gensler consider securities-backed stablecoins as securities, but U.S. Congressman Warren Davidson also told the media that it is challenging to see these stablecoins as anything but securities. Therefore, securities-backed stablecoins should be regulated by the U.S. Securities and Exchange Commission.

This article is authorized and reproduced from Horizon News Network