President Joe Biden’s nominee to lead the US Securities and Exchange Commission has promised to provide ‘guidance and clarity’ to the rapidly evolving market of cryptocurrencies.

Speaking during his confirmation hearing before the Senate Banking Committee, Gary Gensler offered the first thoughts on handling cryptocurrencies if he is confirmed to lead the top US markets regulator.

As SEC chairman, he would promote the new technology while ensuring investor protections. So far, the SEC has not adopted rules specifically tailored to cryptocurrencies and how they should be treated by people and companies, which some argue has created an unclear rulebook.

As a decentralised asset created by users, Bitcoin is likely exempt from securities laws. But there is a ‘strong case’ that digital currencies created and issued by companies have likely violated securities law, Gensler said at a conference in 2018, according to Reuters. These include the second and third most widely used virtual currencies, which were created by Ripple Labs and Ethereum.

The crypto industry as well as some SEC officials have for years been calling for clarity over how cryptocurrencies fit into securities laws. Previous SEC chief Jay Clayton took the view that most coin offerings, a cryptocurrency fundraising mechanism, appeared to run afoul of securities laws.