Top US regulator Gary Gensler ups the pressure on crypto exchanges after Coinbase spat, saying they need to 'come in and talk to us'

• SEC boss Gary Gensler upped the pressure on crypto exchanges on Tuesday, saying they should "come in and talk."
• He said exchanges should be registering with the SEC if they offer securities, which he argued many do.
• Yet debate over what constitutes a security is a tricky issue and triggered a spat with Coinbase last week.

Securities and Exchange Commission boss Gary Gensler has said crypto exchanges need to "come in and talk" to the markets regulator, just days after clashing with trading platform Coinbase over one of its products.

Gensler will appear before the Senate banking committee on Tuesday and used his prepared remarks to increase the pressure on crypto exchanges, which he has previously said he would like to regulate more closely.

The SEC boss said exchanges need to register with the Commission, because some of their tokens or products may be securities. That's unlike bitcoin, which regulators think is more like a commodity.

"I've suggested that platforms and projects come in and talk to us. Many platforms have dozens or hundreds of tokens on them," Gensler said.

"While each token's legal status depends on its own facts and circumstances, the probability is quite remote that, with 50, 100, or 1,000 tokens, any given platform has zero securities."

He added: "Make no mistake: To the extent that there are securities on these trading platforms, under our laws, they have to register with the Commission unless they qualify for an exemption."

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Gensler's strong statement comes after the SEC cracked down on Coinbase, threatening to sue the $64 billion crypto exchange if it went ahead with launching a digital asset lending product called Lend.

In response, Coinbase's CEO Brian Armstrong accused the SEC of "really sketchy behavior" and said he failed to see how the lending product was a security.

The spat goes to the heart of a key issue facing the SEC, which is how to treat crypto products that have only been developed over the last few years.

Gensler has previously said that products that bear a specific interest-rate return could fall under SEC oversight as securities. And he has hinted some stablecoins could also feed into that category.

Yet some lawmakers and crypto-industry figures would like to see more action from the SEC in clarifying what it thinks it can, and can't, regulate.

Armstrong said last week Coinbase was being "threatened with legal action before a single bit of actual guidance has been given to the industry."

Gensler said in his prepared remarks that the SEC is working with the commodities regulator, the Federal Reserve, the Treasury and other bodies on a regulatory framework.