SEC To Provide 'Flexible' Pathway For Crypto Firms To Register Tokens As Securities

The Securities and Exchange Commission (SEC) will soon come up with a new pathway for crypto firms to register their digital tokens as securities with the financial regulator.

SEC Chair Gary Gensler said the "flexible" pathway will make it easier for token projects to register their offerings as securities and enable crypto and non-crypto securities to trade side-by-side.

"I have asked staff, in working to register crypto security intermediaries, to recommend a pathway to allow both the crypto security and crypto non-security tokens to trade versus or alongside one another," Gensler said in a written testimony submitted to the Senate Banking Committee. "Given the nature of crypto investments, I recognize that it may be appropriate to be flexible in applying existing disclosure requirements."

Gensler will appear before the committee Thursday for a regular oversight hearing. "Given the nature of crypto investments, I recognize that it may be appropriate to be flexible in applying existing disclosure requirements," the SEC chair said.

Gensler has stressed that most of the crypto assets are "securities" and they need to get registered with the financial regulator. In his testimony, the SEC Chair said regardless of whether the crypto firms are decentralized or centralized, their offerings should be registered with SEC.

Furthermore, he emphasized decentralized finance (DeFi), which is often considered to be different from securities, should be registered as securities.

It was earlier reported that the SEC was aiming to bring regulatory clarity into the crypto industry, and to do so, the securities regulator was creating a new office to scrutinize public disclosures of crypto companies.

"Some, like Bitcoin, and that's the only one, Jim, I'm going to say because I'm not going to talk about any one of these tokens, my predecessors and others have said, they're a commodity," Gensler told CNBC's Jim Cramer in June.