The head of the United States securities regulator was quoted as saying in a recent interview that every cryptocurrency, with the exception of Bitcoin, is a security that falls under his organization’s jurisdiction. Cryptocurrency lawyers have refuted these claims and have stated that this is not true.
Gary Gensler, the chair of the Securities and Exchange Commission (SEC), stated on February 23 in an extensive interview with New York Magazine on cryptocurrencies that “anything other than Bitcoin” falls under the agency’s purview. The interview was about cryptocurrencies.
In contrast to Bitcoin, he explained, other cryptocurrency initiatives “are securities because there’s a group in the middle and the public is anticipating gains based on that group.” Bitcoin, on the other hand, does not have a middleman.
Notwithstanding Gensler’s asserted dominance over the cryptocurrency industry, Jake Chervinsky, a lawyer and policy lead at Blockchain Association, an advocacy group for cryptocurrencies, contended in a tweet dated February 26 that Gensler’s “opinion is not the law.” Jake is part of the Blockchain Association.
He went on to say that “unless and unless” the SEC “proves its case in court” for its jurisdiction over each individual token “one at a time,” then the organization “lacks the ability to control any of them.”
Attorney Logan Bolinger also weighed in on the debate, tweeting on February 26 “that Gensler’s thoughts on what is or isn’t a security are not legally dispositive.” This phrase means that it is not the conclusion reached by the court about the legality of the situation.
According to Bolinger, “the meaning of the law and how it should be applied are ultimately determined by judges, not chairs of the SEC.”
Jason Brett, the policy director of an advocacy group called the Bitcoin Policy Institute, said that Gensler’s words “shouldn’t be praised, but feared,” and he added that “there are methods to win other than via a regulatory moat.”