SEC Chairman: “Only Bitcoin is not a security”

US Securities and Exchange Commission (SEC) Chairman Garry Gensler said that nearly all cryptocurrencies have the characteristics of securities, except Bitcoin.

SEC Chairman: “Only Bitcoin is not a security.” Photo: Bloomberg

In a recent interview with New York MagazineSEC Chairman Gary Gensler once again reiterated that most cryptocurrencies today can be classified as securities, with the exception of Bitcoin (BTC).

The above statement was made by Mr. Gensler in the context of the SEC’s continuous legal actions in the past 3 months against individuals and organizations involved in serious crashes in the cryptocurrency market in 2022. , with the argument “security” is frequently used, including:

Mr. Gensler in an interview revealed himself in March 2022, rejecting FTX’s proposal to cooperate with IEX stock exchange to deploy a new generation trading platform, saying that it has many potential conflicts. conflict of interest. The SEC Chairman also denied that he had private meetings with Sam Bankman-Fried between 2021-2022.

When asked about the bill advised by Sam Bankman-Fried to the US Congress, which would give the management of Bitcoin, Ethereum and other cryptocurrencies considered “commodities” to the Futures Trading Commission. (CFTC), the financial regulator seen as a “rival” of the SEC, Gensler stated that he has no problem with the bill, except that its investor protections are still ” vague”.

The chairman affirmed that the SEC has all the necessary tools to regulate the cryptocurrency market. Mr. Gensler also presented his views on the aspects that need to be monitored, according to which all cryptocurrency transactions are regulated by the SEC, except spot trading for Bitcoin and the purchase and sale of products and services using cryptocurrencies as a payment method.

Mr. Gensler explained:

“SEC will manage it all [tiền mã hóa] except Bitcoin. In other crypto projects, you can find websites, see the entrepreneurs behind, they can register a company in a tax haven, they can set up an operating organization, have a lawyer to hide its control over the project.

They can issue the token outside of the US before giving it to US investors. But in essence, these tokens are securities because there is an institution in the middle and the public expects the profits to be generated from that organization’s activities.

Bitcoin, in the above understanding, cannot be considered a security because the founder has long since left the project, leaving management in the hands of the community. Bitcoin also does not have an intermediary organization to coordinate activities in the network, not even a prominent developer to guide the community.

The SEC Chairman warned crypto companies that have not yet registered with the Securities and Exchange Commission that “time is running out.” Mr. Gensler said many crypto companies are providing services that are behind the scenes “mixing up customer funds and full of conflicts of interest”. These products under traditional financial regulation would certainly not have been licensed for release to the public. In addition, many companies are taking on multiple roles at the same time, from exchanges, lenders, market makers, brokers, investment advisors and asset custodians.

“There are regulations to prevent such conflicts of interest in the traditional finance, stock market, commercial banking industry, and should not be allowed to occur in crypto as those crypto companies are not currently compliant. securities regulation,” Mr. Gensler said.

When asked about the actual economic-financial benefits of cryptocurrencies, President Gensler said that crypto has always been praised for two aspects: storing data using blockchain and storing value/payment in money. encode.

Regarding the application of blockchain, Mr. Gensler acknowledged that this is an important technical invention, helping to preserve information transparently, resistant to censorship and attack, although the need to use it at the present time is not yet High. However, as for the money making function, the SEC Chairman expressed skepticism.

“History from ancient times to the present has taught us that economies often operate around a certain currency. Having a single measure of value and trading instrument creates an effective network effect.

I don’t think using a more micro-currency will help the economy, and in fact we haven’t seen such an example in centuries. Most of the current crypto tokens will fail anyway, because of their economic nature they are nothing.”

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