Departing U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler has maintained that the regulatory agency has never designated Bitcoin and Ethereum as securities.
Moreover, he distinguished the world’s leading cryptocurrency by market capitalization from other coins, stating they still need to validate their genuine value.
A Clear Differentiation for Bitcoin, Ethereum
Gensler made these remarks in exit interviews with Yahoo Finance and CNBC’s Squawk Box, where he contemplated his term, ending as the Trump administration readies to assume office.
In conversation with Yahoo Finance’s Jennifer Schonberger, the agency head emphasized that the SEC has never categorized BTC and ETH as securities.
“My predecessor and I, we’ve never claimed Bitcoin is a security. We haven’t indicated that Ethereum is a security,” Gensler asserted.
Curiously, his comments appear inconsistent, particularly regarding Ethereum. A filing from April 2024 indicated that the agency believed for at least a year that ETH was an unregistered security trading against relevant laws.
Nevertheless, there appears to be no confusion regarding Bitcoin, with Gensler reaffirming its classification during his CNBC appearance, asserting that BTC does not fall under securities legislation, unlike numerous other coins in the marketplace.
When questioned why he hadn’t explicitly clarified the status of ETH and BTC, Gensler responded that his role necessitated extreme caution with his phrasing.
Although the Biden appointee described Bitcoin as “highly speculative,” he still recognized that, considering its rising popularity globally, it might evolve into an asset akin to gold in the future.
On the other hand, he offered no praise for other cryptocurrencies, asserting they must first demonstrate their authentic use case and value proposition:
“These other thousands of projects need to present their use case and prove that they genuinely have fundamentals backing them, or they won’t survive.”
Critique of the SEC’s Strategy
One of the most controversial aspects of Gensler’s tenure was the SEC’s enforcement-oriented approach to cryptocurrency regulation. Detractors argue that the agency has prioritized punishing noncompliance over establishing clear guidelines for the sector.
In response to this query by CNBC’s Andrew Sorkin, the Commission’s chair shifted the responsibility for developing new regulatory frameworks to Congress. He also lamented the significant levels of noncompliance by crypto projects, many of which he asserted fell under the auspices of securities laws.
On the recent appellate court’s requirement that the SEC provide a better rationale for denying Coinbase’s proposal for the agency to create crypto-specific regulations, the former MIT professor remarked, “Disliking the law and rules doesn’t imply that laws and rules do not exist.”
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