Gary Gensler, Chairman of the U.S. SEC, spoke at an event at the New York University School of Law, sharing his views on cryptocurrency regulation. He believes that cryptocurrencies like Bitcoin are unlikely to become widely used as payment methods. Instead, he sees them more as a store of value. Gensler pointed out that most countries prefer to have one official currency, making widespread crypto adoption as a currency unlikely.
At the event, the former SEC Commissioner, Robert Jackson Jr., asked Gary Gensler about applying the Howey Test to cryptocurrencies. Gensler argued that it serves the purpose of investor protection and is essential for the proper functioning of financial markets. He reiterated the fact that securities laws are all about making sure that investors are fully apprised of their prospective investments, be it in green energy, AI or crypto.
Gensler Highlights 45% Rise in Crypto-Related Losses in 2023
The SEC has recently gone on record against some of the largest crypto firms such as FTX, Binance, Kraken, and Coinbase. Gensler has repeatedly said that crypto exchanges must register with the SEC. He also thinks that most of the cryptocurrencies should be classified as securities. However, crypto firms have countered that the current laws do not apply to the new generation of firms in the digital asset space.
Gensler also commented on fraud in the crypto sphere. He quoted an FBI report that revealed a 45% rise in crypto-related losses in 2023 from the previous year. He said that most of the big names in the crypto sphere who were considered leaders a year ago are either in prison or have been arrested and are awaiting extradition.
In response to another question, Gensler said there is no need to create a new regulatory approach to digital assets. He was very specific that existing laws are in force regardless of whether people in the industry like them. He also pointed out that when the SEC says “crypto asset securities,” it means all the contracts and understandings of the sale of the assets.
In his last note, Gensler said that it is up to investors to determine the value of tokens. He also stressed that there was no way that cryptocurrencies would become a replacement for the traditional currency. However, they will have to demonstrate their utility by doing it in a legal and appropriate manner.
