Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the recent comments of Gary Gensler, chair of the SEC, regarding cryptocurrencies.
Critical of Cryptocurrencies
The current chair of the SEC, Gary Gensler, delivered a critical speech on the cryptocurrency industry at NYU School of Law in Manhattan last Wednesday as part of a wide-ranging conversation with NYU Law Professor Robert Jackson. Gensler is known for his cautious approach yet he provided an expansive speech on the current state of the cryptocurrency sector. Gensler stated his scepticism of the industry and the potential use of Bitcoin or Ether for payments, instead suggesting it is likely to remain as a store of value. He went on to reference historical economic practices and even suggested that economies function better with a single nation-issued currency.
The comments from Gensler are not exactly new and he once again demonstrated his distaste for the industry. He stated it is rife with fraud and scams, and went on to claim that many of the industry's leading figures are either incarcerated or facing extradition, a statement that does not align with the current status of many prominent industry leaders. He also seems to forget that the most common used currency for fraud and scams is of course FIAT. All in all the generalisation of the industry by Gensler was met with disagreement from the crypto community.
He statement was made in response to a question from an attendee about what the value of cryptocurrency would be to its users if totally brought into the regulatory fold. Gensler also noted that the agency operates on a "merit neutral" basis and that the investing public will decide the overall value of an potential utility with Bitcoin and crypto.
Gensler also referenced the Howey Test to determine whether tokens are securities. He sees no need for additional regulatory framework beyond this test, which was granted by the Supreme Court in 1940. The importance of identifying a central enterprise in token issuances was mentioned along with a suggestion that a lot of the current tokens would meet this criteria of an investment contract. His comments offered little in terms of clarity or hope for regulatory adaptation to new technological and market conditions.
Gensler stated:
"But I did teach this stuff up at MIT and so forth, so I'm just going say this – these debates literally go back to Plato and Aristotle," he said. "This is 3,000 years of history. Hundreds of great nations, thousands of nation-states – we tend to have one currency per geographic economic state. We tend even not to have bimetallism."
Gensler went on to defend the agency's track record of aggressive enforcement actions against crypto companies. His time as chair of the SEC has been marked with a firm stance on crypto regulation, much of which has drawn criticism from the industry. SEC Commissioner Mark Uyeda has previously described Gensler's leadership as detrimental to the crypto sector and it is likely his days are numbered. Gensler stated during his speech that Gresham's law, a monetary principle dating back to the 19th century which asserts that "bad money drives out the good" is applicable and most nations feel more comfortable with just a single currency.
"You want one currency unit because it's a store of value, a medium of exchange, a unit of account. It all has tremendous economics of networks. So it's unlikely this stuff is going to be a currency. It's going to have to show its value through disclosure, through use. The same way you pick amongst the thousands of securities that are listed on the stock exchange."
Gensler refused to comment on how the upcoming presidential election would impact the SEC, or whether he would step down if former President Trump were to win re-election.
Have a great day.
Peace. CryptoGod-1.
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