Last Updated: 27 February 2023
Bitcoin is not a security. The erst is. So states Gary Gensler in an interview.
In an interview with New York Magazine on 23 February, which covered a wide range of topics related to crypto, Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), claimed that “everything but Bitcoin” falls under the agency’s jurisdiction. He added that other crypto projects “are securities because there is a group in the middle and the public expects profits based on that group”, which he said is not the case with Bitcoin.
The SEC does not control the whole world. However, they are one of the most influential regulators in the world. Any hugely stringent policies on tokens, stablecoins and the like may well affect the rest of the world. At the same time, then, it is and will remain a US approach, not a global one.
That is still to come. At the recent G20 meeting in India, it was announced that there will be a new ‘synthesis document’ jointly produced by the International Monetary Fund (IMF) and the Financial Stability Board (FSB). This document will serve as the basis for future global crypto regulations.
Back to Gensler.
Gensler is the current chairman of the US Securities and Exchange Commission (SEC), appointed by President Joe Biden in 2021. He has an extensive background in the financial sector, having worked as a partner at Goldman Sachs and led the Commodity Futures Trading Commission under President Obama.
Gensler is busy working on cryptocurrencies as head of the SEC. As chief responsible for overseeing securities markets in the US, his organisation and him are keen to gain control of the crypto market.
Bitcoin is something different from all other tokens, is Gensler’s contention in a nutshell. That implies that if all other tokens are a security, the SEC will have to do a lot of extra oversight.
US lawyers are reacting to the recent developments. And the reactions are as you might expect. Jake Chervinsky says Gensler should just start proving this contention nicely in court. With every token again.
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
An exchange or broker offering securities in the United States has to meet very different requirements than when selling bitcoin, for example.
It seems a matter of time until the SEC opens the attack on the industry. In what way, that remains to be seen.