Gensler calls Bitcoin and Ethereum non-securities in new video.
A video from a 2018 crypto-themed event hosted by Bloomberg and Fidelity has surfaced, featuring Gary Gensler, the current chairman of the United States Securities and Exchange Commission (SEC). In the video, Gensler stated that four major cryptocurrencies, Bitcoin (BTC), Ethereum (Ether), Litecoin (LTC), and Bitcoin Cash (BCH), are not securities. Gensler made these comments while addressing institutional investors at the Massachusetts Institute of Technology, where he used to work as a professor before joining the SEC in 2021 after being nominated by President Joe Biden. He emphasized that these four digital assets accounted for approximately 75% of the market and highlighted their exclusion from the securities category. However, Gensler’s recent suggestions that most cryptocurrencies, aside from BTC, may be considered securities have raised concerns within the crypto industry. Critics argue that his lack of clear guidance on the legality of specific tokens before initiating a “regulation by enforcement strategy” without a clear path for compliance has created uncertainty and frustration among the crypto community. The SEC recently labeled 19 more crypto assets as securities, including Solana (SOL), Polygon (MATIC), Flow (FLOW), and Near (NEAR), making it a total of 68 digital currencies that the Commission has identified as securities under Gensler’s leadership. However, none of the crypto assets mentioned in the 2018 video have yet made it to the SEC’s list.
Is Ethereum a Security or Not?
The SEC chair previously indicated that all cryptocurrencies apart from BTC are securities, and the Commission has sued many crypto companies for violating federal securities laws by selling unregistered securities in America. In April, Patrick McHenry, chairman of the US House Financial Services Committee, requested that Gensler provide a clear answer as to whether Ethereum is a security. Still, the SEC chair failed to answer the question definitively. In another video of Gensler from 2019, he praised the smart contract platform Algorand for its underlying technology before declaring its native token ALGO security in a lawsuit against the crypto exchange Bittrex. Earlier in March, the SEC chairman disclosed that Ether could be a security after the Ethereum Merge, referring to the protocol’s transmission to a proof-of-stake (PoS) consensus mechanism last year. According to him, users’ profits from staking on such protocols indicate that the tokens are securities and should be regulated under the SEC purview.