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Gary Gensler Reaffirms SEC’s Stance on Bitcoin, Criticizes Crypto Industry for Non-Compliance
Bitcoin is not a security, according to U.S. Securities and Exchange Commission (SEC) chair Gary Gensler. Speaking on CNBC’s Squawk Box on September 26, Gensler reiterated the SEC’s regulatory stance on Bitcoin, referring to it as a non-security commodity. This aligns with previous SEC filings that have categorized Bitcoin as a $1.2 trillion asset.
SEC’s Position on Bitcoin and Ethereum
Under Gensler’s leadership, the SEC has approved approximately 10 spot Bitcoin exchange-traded funds (ETFs) and allowed Bitcoin trading on American exchanges like Nasdaq. In contrast, while Ethereum ETFs have also been approved, the SEC has taken a more contentious approach toward Ethereum, the second-largest cryptocurrency.
The SEC has initiated multiple investigations into Ethereum service providers such as Consensys and Uniswap, as well as other crypto trading platforms like Coinbase. Despite these actions, the SEC has refrained from classifying Ethereum as either a security or a non-security, while still enforcing federal regulations on entities within the Ethereum ecosystem.
Controversy and Criticism
U.S. policymakers, especially those in the House of Representatives, have criticized Gensler for creating confusion within the digital asset industry by using ambiguous terms like “crypto asset security” in major legal cases. Earlier this week, Gensler faced criticism during a Congressional hearing attended by all five SEC commissioners. He was accused of stifling blockchain innovation and causing disarray in the crypto market.
“Look, not liking the rules is not the same as, there aren’t rules,” said Gary Gensler on crypto regulation. “I think there’s a lot that have profited off of the public’s interest in this field but profited without the proper disclosures.”
During the hearing, Gensler emphasized that existing rules are being ignored by crypto industry participants, who he claims are seeking special treatment. His statements were in stark contrast to remarks made by Robinhood Markets’ lead attorney Dan Gallagher at a separate hearing.
Robinhood’s Frustrations with the SEC
Gallagher, a former SEC employee, criticized the commission for being largely unresponsive to Robinhood’s registration attempts. He mentioned that the SEC staff either delayed feedback or failed to respond altogether in some cases. Commissioner Hester Peirce supported Gallagher’s claims, suggesting that Congress should intervene to address the policy gaps created by the SEC’s inaction.
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