SEC Chair Stands Firm: ‘Vast Majority’ of Cryptocurrency Tokens Are Securities

In prepared remarks delivered at the Practising Law Institute’s “SEC Speaks” program on September 8, Chair Gensler emphasized and reiterated his long-standing position that the vast majority of cryptocurrency tokens are securities, and he noted that “only a small number of tokens, even though they may represent a significant portion of the crypto market’s aggregate value” may qualify as “crypto non-security tokens.” Gensler’s remarks are in line with the position he has historically promoted and are consistent with increased crypto-related enforcement actions by the Commission. Chair Gensler began his recent remarks by expressing his view that “[n]othing about the crypto markets is incompatible with the securities laws. Investor protection is just as relevant, regardless of underlying technologies.” This stance echoes the position he took in an August 2022 op-ed titled “The SEC Treats Crypto Like the Rest of the Capital Markets,” wherein Chair Gensler pointed to recent market events demonstrating the applicability of U.S. securities laws and referred to the SEC as “the cop on the beat.” Still, Chair Gensler did acknowledge that “it is important to look at the facts and circumstances of a product, not its label, to determine whether it is a crypto security token, a crypto non-security token, or another instrument.”

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