Crypto platforms are doing business 'outside the law' if they don't register with the SEC, says regulator's chief Gary Gensler

• SEC Chair Gary Gensler said many crypto exchanges likely have securities available to trade and must disclose them to the regulator.
• If they don't disclose the securities, they are doing business "outside the law," he told Yahoo Finance on Friday.

Many large cryptocurrency exchanges likely offer securities available to trade, and that brings them within the legal purview of the Securities and Exchange Commission, according to the SEC Chairman Gary Gensler.

"The law is clear … a platform that has securities on it is an exchange. It's a question of whether they're registered or they're operating outside the law," he told Yahoo Finance on Friday.

Gensler added that the existing law for crypto platforms is "straightforward," and that many do in fact offer securities. And that means they should be registered with the SEC and have "appropriate disclosure about the tokens" to protect users and the public from fraud and financial manipulation, he said.

He noted that many cryptocurrency tokens have previously been found to be securities, so it is very likely that at least some of the many thousands of tokens offered on various platforms will also qualify as securities.

Additionally, Gensler explained that it is the SEC's responsibility to protect investors, and that protection in large part comes from company disclosures about these "highly investable assets."