SEC Chair Gensler says investors don’t get ‘needed disclosures’ for crypto assets: CNBC Crypto World

SEC Chair Gensler says investors don’t get ‘needed disclosures’ for crypto assets: CNBC Crypto World

today Bitcoin and ether hold their ground after yesterday’s losses SEC chair Gary gendler joins CNBC squawkbox to talk about the wells notice the agency sent to Robin Hood and Dave weissberger of coin Roots discusses how the regulator seems to be stepping up its enforcement of the crypto industry welcome to cnbc’s crypto world I’m Brandon Gomez cryptocurrencies were mixed this morning after spending Monday in the red by noon Eastern bit coin stayed pretty much flat trading Higher by only 1/10th of 1% ether was in the red but only by a little more than half a perc xrp though down further falling about 3 and a half% okay let’s talk about the top stories binance CEO Richard Tang is calling for the release of a binance executive currently held in Nigeria in a blog post this morning Tang said the detainment of tigran gamban has set a dangerous new precedent for all companies worldwide and that Aman didn’t go to Nigeria as a decision maker or negotiator instead Tang says the executive went as a functional expert in financial crime gambaran was detained alongside another binance executive Nadim andreala who fled Nigeria earlier this year authorities in the country accused binance of non-payment of value added and Company income taxes failure to submit tax returns and aiding tax evasions by customers next Australia is reportedly stepping up efforts to crack down on evasion of capital gains taxes for crypto wers reports the Australian tax office requested information regarding 1.2 million accounts to crack down on users avoiding taxes the atto reportedly said the information will help the agency find traders who failed to report crypto assets or when they sold it on Monday the Australian financial review reported that as part of a surveillance effort announced in April the tax agency said it would require crypto exchanges to provide information including names birthday and transaction details last SEC chair Gary gendler joined CNBC squawkbox this morning where he responded to a question about the agency’s wells notice to Robin Hood on Monday the trading app disclosed that the agency sent the letter over the weekend warning the SEC could soon pursue enforcement actions over Robin Hood’s crypto operations gendler was asked what investors who use Robin Hood should know about the agency’s recent enforcement actions including that Well’s notice I can’t speak to anyone uh company but stepping back from it the field of crypto assets without prejudging any one of them many of those tokens are securities under the law of the land as interpreted by the US Supreme Court so we follow that law and you the investors are not getting the required or needed disclosures about those assets at the same time research firm KBW said in a report that Robin Hood is more likely to win in a case against the SEC than its competitors the report called the wells notice quote surprising given Robin Hood’s historically very conservative approach to crypto asset listing with an offering of only 15 crypto assets on its us platform that’s compared to some others which KBW notes have more than 200 all right sticking with Robin Hood for our main story we spoke with Dave weissberger executive chairman of coin Roots about that Wells notice to Robin Hood and what the sec’s growing list of enforcement actions will mean for the industry at large so Dave we had this blog post from Robin Hood come out saying it’s received a Wells notice for its crypto operations I think a lot of people were caught off guard by this KBW even said in a report this morning that the move was surprising what’s your reaction to this development is it actually surprising to you well I wish I could say I was surprised but it’s a continuation of an c c pgum basically against the crypto industry effectively people talk about the word regulation but it’s not really regulation that they’re after they’re really after prohibition they’re really doing everything they can if you think about it if you’re a average investor you’re not a credited uh they’re going after coinbase they’re going after Kraken now they’re going after Robin Hood they’re basically saying you shouldn’t be allowed to own what’s been one of the best performing asset classes uh you know period moreover the SEC is is is not supposed to be a merit-based regulator they’re supposed to make sure there’s good disclosures and there’s actually more information about most crypto projects certainly the ones that that Robin Hood lists than there are about quite a few other assets so it’s just more of the same I wish I could say it was something else but it’s really you know a war and you know one can speculate as to why but it seems fairly clear what’s going on here and so on that point what do you think the sec’s thinking is here they’ve gone after a lot of Crypton native businesses like coin base and Kraken but this is perhaps a little different given Robin Hood’s limited role in crypto compared to its stocks business what’s the motivation in your view there’s only one motivation I wish I could I can’t think of anything else maybe there’s something else maybe smarter people than me could figure something else out it’s to essentially try to push crypto out of the United States push digital assets look McKenzie I like everyone when I talk to people in the crypto industry and at coin routes we talk to just about everybody at at a senior level we all believe believe that the future of capital markets is going to be digital and we think that crypto is incubating many of the market structure ideas many of the technologies that are going be essential to compete in capital markets in the next 25 years and the SEC is trying to push it offshore the only one possible reason for that is to protect incumbents protect people who are effectively the best damn buggy whip manufacturer to use Danny DeVito old line but the people who are basically defending the analog Financial system that relies on paper tickets sitting in a vault underneath 55 Water Street that’s the only thing we can think of you know Elizabeth Warren is Lally is the leader of the anti- crypto Army and effectively while she likes to yell at the big Banks she’s been protecting them she’s even let the big Banks help write rules that she’s proposed so it really is that simple I wish it wasn’t because crypto should not be by should be bipartisan it should not be a partisan issue but it has become one sec chair Gary gendler came on CNBC today and and talked about the agency’s strategy and crypto really doubled down on the idea that the crypto industry is Rife with non-compliance and that the agency really has to be the cop on the beat to crack down where do you think the industry stands in terms of cutting off Bad actors or this idea that there is widespread violations of Securities Law well there’s two points here first I actually think it would be a great thing if the SEC was the cop on the beat if they actually did focus on enforcement on cases where there was provable harm I think that the industry is cheering for the SEC in the dwan case for example and maybe not cheering because they’re going to try to use it as a precedent to go after other people but the fact that that dwan was a bad actor I don’t think there’s much argument about that in the industry and people think he should be punished the problem is is what he’s actually doing and and and it’s maybe the only time I’ve ever agreed with John Reed Stark who’s testifying today in front of one of the congressional committees used to work at the SEC he admitted to me I was right which is that the SEC back decad ago when he was there used to focus on cases where there was harm where investors lost money but this SEC doesn’t care whether there’s harm they’re going after more jurisdiction and more technical violation so if you technically say you’re violating Securities laws well that’s true but what he’s not telling you McKenzie is that there is no path to comply with security rule for digital asset issuers or markets there literally is none now if you look at Robin Hood it’s really important understand Robin Hood is operating their crypto business out of an Affiliated non broker dealer well why are they doing that that’s because finra and the SEC have not approved any broker dealers offering crypto as non-securities as a result you know programmers I tweeted this you know a couple days ago it’s we call this a deadly Embrace you’re literally there’s no way through if it’s a security then there’s no path for making it work and if it’s not a security they’re not allowing them to do it so effectively they’re bogging it down and they’re they’re standing on on ceremony basically how are you thinking about the current regulatory regime for your business does the sec’s view of the industry play into how you make decisions at your company absolutely well there’s two things we stayed a software company five years ago our plan was to register with fer and become an introducing broker trading non-securities or if if any digital assets became Securities to trade them the reality is we couldn’t do it because there’s no path to do doing it so we’re a pure software provider which limits our profit potential for sure you know we stay out of the client flow of funds we don’t do any of that we offer algorithms we offer trading access we offer professional investors the ability to do it but all of our clients are clients of other exchanges but almost all of our businesses moved overseas and in fact we’re moving overseas as well we’re opening offices offshore uh in fact you know we’re opening up Affiliates you know in the UAE uh because they have a actual regulatory framework there so definitely impacted us every single CEO I talk to every other company that we talk to they all are facing the same pressure it’s extremely rare to find a crypto company that isn’t either moving offshore opening up offshore or or considering it and that’s really a shame because America our economy has benefited immensely from having the best Capital markets in the world over the last 30 years and if all the new innovation moves off we’re going to lose that and that would be very sad as a patriotic American I really hope that that does not come to pass all right that’s all we have for crypto world today we’ll be back here again tomorrow see you then

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Dave Weisberger, executive chairman of CoinRoutes, discusses Robinhood’s disclosure that the SEC sent a Wells Notice over its crypto operations.

Chapters:
00:00 – CNBC Crypto World, May 7, 2024
0:25 – Bitcoin and ether hold steady
0:43 – The headlines
3:38 – Dave Weisberger of CoinRoutes

For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/42d859g
» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC on Threads: https://cnb.cx/threads
Follow CNBC News on X: https://cnb.cx/FollowCNBC

#CNBC
#CNBCTV

SEC Chair Gensler says investors don’t get ‘needed disclosures’ for crypto assets: CNBC Crypto World