SEC Chair Gary Gensler has once again stated that Bitcoin is not a security. This comes as he continues to face pressure from lawmakers and the crypto industry over his regulatory approach.
Gensler also emphasized that contrary to popular belief, America actually has clear crypto rules.
“Not liking the rules is not the same as, there aren’t rules.”
According to him, many crypto companies are trying to evade regulations by pretending they don’t exist.
Gensler has repeatedly pointed out that several crypto firms have taken advantage of public interest without following proper disclosure practices.
He described it as a “classic securities” case, where these companies are raising money without transparency.
He claims that this falls under the SEC’s jurisdiction because it involves investor protection.
His comments follow an infamous congressional hearing last year, where he and his commissioners were questioned about their actions against crypto companies.
The debate was centered on whether the SEC should focus more on providing regulatory clarity rather than suing these companies.
Lawmakers slam SEC over lack of clarity
Gensler faced tough questioning from both sides during the nearly five-hour hearing. Rep. Patrick McHenry, one of his harshest critics, said the SEC should focus on helping stakeholders, not resorting to “ad hoc actions.”
Rep. Tom Emmer said:
“You’re consolidating your own power while crushing opportunities for everyday Americans.”
He added that even federal courts have pointed out that the SEC doesn’t have the authority to squash competition in financial markets.
But Gensler remains firm in his belief that crypto companies are fully capable of complying with existing regulations but simply choose not to. In his own words:
“There is nothing about the crypto asset securities markets that suggests that investors and issuers are less deserving of the protections of our securities laws.”
He believes that Congress could have limited securities laws to stocks and bonds back in 1933 and 1934, but they didn’t.
Instead, they included a long list of over 30 items, including the term “investment contract” under Howey. Gensler says this broad definition covers many digital assets today.
During the hearing, Judge Torres asked if an actual contract is required, to which Gensler responded by citing a vague definition from former Supreme Court Justice Thurgood Marshall.
“I do not go to MIT, but in the Bronx, if I ask whether any investment contract includes a contract, the answer is typically yes or no,” Torres shot back.
He then grilled Gensler further, asking whether buying a Pokémon card was considered a security. Gensler said it wasn’t.
Torres pushed harder, asking if a tokenized Pokémon card bought on a blockchain would be a security. Gensler dodged the question, saying he would need more details.
Meanwhile, billionaire Mark Cuban has shared that he wants to be the next SEC Chair.
Crypto lawyer John Deaton showed support, calling him a potential “breath of fresh air” compared to Gensler’s “lawlessness.”
Cuban has long been vocal about the SEC’s failure to establish clear rules. He even jumped into the recent debate against the regulator’s classification of NFTs as securities. Cuban tweeted, “Gensler is gone.”
