SEC Chairman Speaks on Bitcoin in Final Days of His Term
This is one of the last statements from the SEC Chairman before he leaves office.
SEC Chairman Gary Gensler, in the final days of his term, made some noteworthy statements about Bitcoin and other digital assets to CNBC and Yahoo Finance.
On CNBC, Gensler once again emphasized that Bitcoin is a different asset than other cryptocurrencies, it can become an asset like gold in the future, although it is currently a risky and volatile investment.
He believes that Bitcoin can develop into a globally traded asset, just like the way people have traded gold for thousands of years. According to the SEC Chairman, digital assets other than Bitcoin need to demonstrate a solid use case and foundation, otherwise they will not survive in the long term.
In an interview with Yahoo Finance, the SEC chairman asserted that the agency has never formally declared Bitcoin and Ethereum to be securities. “We, the SEC, have never called them securities,” Gensler said, but noted that he could not explicitly say that either were not securities due to the nature of his work and responsibilities.
Lawmakers, including former House Financial Services Committee Chairman Patrick McHenry, have repeatedly asked Gensler for clarification. “It’s unbelievable,” McHenry said. There is a lack of clarity here, don't you agree?"
Over the past four years, Gensler has been reluctant to recognize assets other than Bitcoin as commodities, saying in 2023 that only Bitcoin is a commodity.
Under Gensler, the SEC has issued subpoenas to companies associated with the Ethereum Foundation. Fortune reported in March 2024 that the SEC launched an investigation dubbed “Ethereum 2.0.” This led to Consensys countersuing the SEC in April 2024, accusing the agency of not being transparent in its investigation.
Meanwhile, in July 2024, CFTC Chairman Rostin Behnam asserted that Bitcoin and Ethereum are commodities and should be regulated by his agency.
However, after the SEC approved Ethereum spot ETFs last year, the move implicitly recognized Ethereum as a commodity. Since then, investors have Asset managers have been racing to apply for approval of products related to other coins such as Solana and XRP, and recently Litecoin.
At the time of the green light for the Bitcoin and Ethereum ETFs, Gensler commented that more than 70%, even 80%, of the crypto market is related to Bitcoin and Ethereum. He also pointed out that the crypto market is not just about these two big coins.
"I'm really concerned about the rest, the other 10,000-15,000 tokens, that exist solely because of investor speculation without full disclosure. That's not in compliance with the law."
Despite his Ethereum-accrediting decisions, CNBC host Joe Kernen suggested in a recent interview that Gensler may be a Bitcoin fan and biased against other coins. Gensler also asserted that he has never owned Bitcoin or any other cryptocurrency, and that he still believes the public needs transparency to make informed decisions.
In 2023, during a Capitol Hill hearing, Gensler avoided answering questions about Ethereum's regulatory status, leading to accusations that he was misleading lawmakers. While Gensler's successor may be more willing to address the issue directly, Gensler's belief that Bitcoin is an outlier will likely persist into his final days at the SEC.
On the flip side, after Gensler steps down, the SEC will be down to three members until President Trump appoints a new one. Paul Atkins, President Trump's nominee nominated to be the SEC Chairman, is expected to assume the role after being confirmed by the Senate. The remaining two commissioners, Hester Peirce and Mark Uyeda, who are friendly to the crypto industry, can work on building a new legal framework. The SEC is also expected to review a series of current lawsuits, especially those not related to fraud allegations such as Coinbase, Kraken, etc.
