Gary Gensler’s recent interview with New York Magazine (NYMAG) has stirred the crypto industry again.
Except for Bitcoin spot trading, the SEC chairman reiterated that he deems all crypto assets and transitions subject to U.S. securities laws.
Although crypto assets have not yet been formally classified, Gensler asserts that “everything except Bitcoin” is a security.
Gensler in @NYMag on crypto:
-everything is a security except bitcoin
-every company out there is in violation
-crypto is pointless but blockchain is kinda neat
Hard to argue you’re acting in good faith if admittedly trying to stamp out an entire industry. pic.twitter.com/Ozw8ZJ3ETO
— Alexander Grieve (@AlexanderGrieve) February 26, 2023
According to him, the individuals behind all crypto initiatives and networks secretly attempt to convince investors to purchase tokens.
“There are people behind these cryptocurrencies using a variety of complex and legally opaque mechanisms, but at the most basic level, they are trying to promote their tokens and entice investors.”
Crypto Lawyers Disagree
He argued that these tokens are securities because there is a group in the middle, and the public expects profits based on this group.
Jacob Chervinsky, attorney and chief policy officer at the Blockchain Association, argued that Gensler’s words or opinion are not law. He stated on February 26 that until the SEC proves its court case, it lacks the authority to regulate any of them.
Chair Gensler may have prejudged that every digital asset aside from bitcoin is a security, but his opinion is not the law. The SEC lacks authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time.
— Jake Chervinsky (@jchervinsky) February 26, 2023
SEC Commissioner Hester Pierce, who has prompted Congress to expedite the implementation of legislation and official classification of crypto assets, has echoed this sentiment. Until then, regulators such as the SEC will take matters into their own hands with these enforcement actions, as they have done with vigour throughout the year.
In response to the SEC’s Kraken crackdown, she stated earlier this month, “Using enforcement actions to tell people what the law is in an emerging industry is not an efficient or fair way of regulating.”
Until there is a comprehensive regulatory framework for digital assets in the United States, the SEC will continue to wage war on cryptocurrencies, regardless of whether or not it has the authority to do so.
Crypto Market Outlook
Asia’s cryptocurrency markets are rising again this Monday morning. The total market capitalisation has increased by 2.4% to $1.13 trillion, but it has been relatively range-bound for most of the month.
According to CoinGecko, Bitcoin was up 2.2% to $23,600, while Ethereum was up 3.3% to $1,644 at the time of writing.