U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler is doubling down on his crypto objections in his first remarks following the second recent court setback in his agency’s sweeping legal fight with the industry.

After decisions in the Ripple case that energized crypto advocates and the even more pronounced failure of the SEC’s Grayscale bitcoin ETF dispute, Gensler is holding the line on warning about the sector flaunting securities laws, according to written testimony set for delivery to the Senate Banking Committee on Tuesday.

“Given this industry’s wide-ranging noncompliance with the securities laws, it’s not surprising that we’ve seen many problems in these markets,” Gensler said in the remarks released Monday, on the eve of the routine SEC oversight hearing.

Gensler will return to a frequent talking point at the hearing:

“The vast majority of crypto tokens likely meet the investment contract test,” according to his testimony. “Given that most crypto tokens are subject to the securities laws, it follows that most crypto intermediaries have to comply with securities laws as well.”

The court judgment in the case involving Ripple and its sales of XRP argued that the way Ripple sold the tokens to retail consumers did not violate securities law. Though the SEC is pursuing an appeal, a number of other crypto companies facing suits from the regulator are likely to quote it in their own motions to dismiss. However, at least one other judge in the same court discarded the Ripple judgment in a recent ruling against Terraform Labs.

While Gensler will be highlighting recent enforcement actions and two of the agency’s rule proposals that effect crypto firms – a proposal on custody and one on redefining the exchange definitions to formally incorporate crypto platforms – he’ll also advise the lawmakers he won’t be able to talk about any “active, ongoing litigation,” which potentially sets aside the topics the industry is most eagerly watching, like the SEC’s high-profile cases against Coinbase and Binance.

Regulations Securities and Exchange Commission Gary Gensler Ripple Grayscale Testimony Senate Banking Committee

Jesse Hamilton

Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.