SEC Chairman: Tokens using mortgage agreements can be considered securities

According to reports, Gary Gensler, chairman of the Securities and Exchange Commission, advised reporters on Wednesday that tokens using mortgage agreements can be considered securities under U.S. law. Gensler said, “The investing public is investing in expected returns, expecting something from these tokens, regardless of whether they are proof of equity tokens. They also want to receive returns from these proof of equity tokens and receive returns of 2%, 4%, and 18%.”

Interpretation of this information:

The recent statements made by Gary Gensler, the chairman of the Securities and Exchange Commission, regarding mortgage agreement tokens and their classification as securities under U.S. law, are generating interest and discussions amongst investors, analysts, and regulators in the cryptocurrency industry.

Gensler’s statement hints at the fact that U.S. securities laws apply to cryptocurrencies and digital assets that bear the characteristics of traditional securities, even if they are not explicitly labeled as such. The chairman’s emphasis on the public’s expectation of returns from these tokens is a clear indication that regulators are closely monitoring the use of digital assets that display similar features to securities.

The concept of expected returns is a central theme in traditional securities regulation, and it appears that Gensler is positioning the SEC to approach digital assets with similar scrutiny. He also highlights the desire of investors to earn returns from tokens through conventional profit-sharing methods such as dividends and profit-sharing schemes.

The implication of this statement is that platforms that develop and trade digital assets that bear the hallmarks of securities may be required to register with the SEC and comply with existing regulatory requirements concerning the offer and sale of securities. This interpretation has significant implications for the decentralized finance (DeFi) industry, which enables users to lend and borrow digital assets such as cryptocurrencies without intermediaries.

It is clear that Gensler is taking a proactive approach to regulating cryptocurrency and digital assets under SEC jurisdiction. The Chairman’s track record suggests that he has a good understanding of the issues involved and that he is intent on striking a balance between investor protection and market innovation.

In summary, Gensler’s statement highlights the SEC’s view on tokens using mortgage agreements, clearly indicating that the investing public’s expectation to receive returns from these tokens, even without being called securities, has put them in a gray area that may resonate with traditional security regulators. The three keywords from Gensler’s statement are: securities, expected returns, and proof of equity tokens, implying that tokens that return dividends or present profit-sharing schemes may be registered with the SEC going forward.