SEC Chairman Gary Gensler Classifies Bitcoin As a Commodity
The Chairman
of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, says
bitcoin is a commodity. He said the SEC, the Commodity Futures Trading
Commission (CFTC), and banking regulators will collaborate to oversee the
crypto sector.
Bitcoin is a Commodity
In an
interview with Mad Money host Jim Cramer on CNBC Monday, Gensler stated his
opinion on cryptocurrency, specifically bitcoin.
"This is
a highly speculative asset class. We’ve known this for a long time,"
Gensler said when asked about cryptocurrency. Citing the "ups and downs of
this speculative asset class," he explained that when people invest in
"bitcoin and hundreds of other crypto tokens," they hope for a
return "just like when they invest in other financial assets"
that are securities.
Chairman Gensler
said that many of these "crypto-financial assets" have "the key
attributes of a security." He further said: "Some of them... are
under the Securities and Exchange Commission." In contrast, citing what
his "predecessors and others have said," he described:
"Some,
like bitcoin, and that’s the only one I’m going to say... are
commodities."
The SEC Chief
noted that besides BTC, he is not going to discuss other crypto tokens
specifically.
Gensler’s
statement coincides with the Chairman of the Commodity Futures Trading Commission
(CFTC), Rostin Behnam, who said last month that bitcoin (BTC) is a
commodity, and ether (ETH) is also a commodity.
Bitcoin
advocates welcome Gensler’s classification. Digital Assets Manager Eric Weiss
tweeted: "Gensler is the 2nd consecutive SEC Chair to declare that bitcoin
is a commodity, making it impossible for this classification to be altered in
the future. Very significant indeed."
The
pro-bitcoin CEO of Microstrategy, Michael Saylor, said: "Bitcoin is a
commodity, which is essential for any treasury reserve asset. This allows
politicians, agencies, governments, and institutions to support bitcoin as a
technology and digital asset to grow the economy and extend property rights and
freedom to all." The Nasdaq-listed software company
has amassed 129,218 bitcoins for its corporate treasury.
Regulators Collaborating on Crypto
Gensler also proceeded to say that the SEC is collaborating with other federal
regulators to oversee the crypto sector, including the CFTC and banking
regulators. He said many crypto tokens are currently trying to operate in a
non-compliant way.
The SEC Chief
then mentioned the stablecoins, noting:
"There’s
work to be done there around stablecoins... There’s a lot of work to be done to
really protect the investing public."
Last week,
Gensler proposed "one rule book" to regulate the crypto sector.
During the
interview on Monday, Cramer brought up Fidelity Investments' allowing bitcoin
as an option for 401(k) plans—a decision that has troubled the Labor
Department. The Mad Money host asserted that it makes people "feel very
comfortable with the asset that is bitcoin." He asked Gensler, "Are
we too comfortable with bitcoin?"
"There’s
a lot of risk in crypto" and "there’s also a lot of risk in classic
securities markets," Gensler replied, elaborating:
"In the
U.S… we have market regulators like the CFTC and the SEC to help protect the
public against fraud and manipulation in the markets."
Gensler added
that there are currently thousands of crypto tokens that do not comply with the
laws, noting that when a group of entrepreneurs sells something to the public,
there must be "full and fair disclosures." The chairman said:
"That’s what the SEC does. That’s what we do really well."
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