SEC Chair Dodges Question About Regulatory Status of Bitcoin

[Leviathan.007]

During a hearing held by the U.S. House Committee on Financial Services on Tuesday, Securities and Exchange Commission Chair Gary Gensler refused to answer the question asked by North Carolina Rep. Patrick McHenry about whether or not Bitcoin and Ethereum are securities: 
"I’m not going to get into anyone token, but I think that the securities laws are quite clear."
Earlier today, McHenry, one of the most influential Republicans on the Financial Services Committee, introduced a bill that would exempt developers from complying with certain securities laws when raising money through token sales.
Gensler has once again emphasized that most of the cryptocurrencies are “investment vehicles”: 
"A lot of these are not real currencies. They are not being used to buy a cup of coffee at Starbucks…Most of them are investment vehicles…They should be within the securities laws."
A handful of digital assets might be competing with gold and silver as a speculative store of value, according to Gensler.
The SEC boss reiterated that his agency needs more help from Congress in order to fill the regulatory gaps.

“It’s a real shame”
Commissioner Hester Peirce, who’s fondly called “Crypto Mom” by some members of the community, recently delivered the most blistering critique of her agency to date.
During her appearance on Yahoo Finance, she said that the lack of regulatory clarity is “a real shame”:
"I think this is really becoming a huge barrier to this industry being able to develop in a way that's safe, but also in a way that allows innovation to happen. And it's a real shame to me that we are not just taking up the mantle as regulators to develop a regulatory framework.  "
Gensler seemingly avoided McHenry’s question about whether or not he has reviewed Peirce’s “safe harbor” proposal.


Source: https://u.today/sec-chair-dodges-question-about-regulatory-status-of-bitcoin-and-ether

[davis196]

Gary Gensler is right.Tokens and even some altcoins are not real currencies,so they should be treated as securities.I don't see a problem here.
Hester Peirce is also right.The lack of clarity in the regulatory frame is stopping the further development of the cryptocurrency industry.No human or company is going to invest money in an industry that might become illegal tomorrow.
I have nothing against more strict regulations over the businesses,that are trying to raise capital via token sales.We don't need any ICO token scams anymore.

[crwth]

So basically, the SEC Boss needs more help in understanding how it can regulate cryptocurrencies since it's an investment vehicle hence still security, right?

I think some people might get confused with the title since it's just about not reviewing the Safe Harbor proposal by Hester Peirce. As indicated in the article

Gensler seemingly avoided McHenry’s question about whether or not he has reviewed Peirce’s “safe harbor” proposal.

For those interested, I found this link:
https://www.sec.gov/news/public-statement/peirce-statement-token-safe-harbor-proposal-2.0

[amishmanish]

So basically, the SEC Boss needs more help in understanding how it can regulate cryptocurrencies since it's an investment vehicle hence still security, right?
--snip--

I doubt that he needs any help as financial regulators are generally very smart people. The only problem is that they have to act in the interest of the citadel that finance has built around itself. They also need to find the right balance between trying to prevent people from scams and enabling innovation with a fair ground for everyone.

As per SEC, any investment that has been made with the intention of a future profit or return will be considered a security. If you go by that definition, Bitcoin is NOT a security but Ethereum and all the other tokens most definitely are. Now they have to strike a balance because Ethereum community is pretty strong by itself and there is a lot of money riding on it. There is too much at stake for SEC to paint everything with the same brush. I am pretty sure that they are trying to get to grips with the methods to regulate all of these new corporations that are calling themselves crypto-native.

[Wexnident]

I'm guessing they're still in the middle ground about it? Basically still being undecisive since they can't judge on which side they should actually place crypto at. I'd reckon they have their answers personally themselves, but I guess they have to view the bigger picture of the system hence why they're still at the indecisive point. It is rather disappointing though since there are opportunities that are being missed with them being indecisive like this.

I'd give them probably another year or two maybe? If they still don't understand what to do by then they've probably just going to retain their stand as is.

[hugeblack]

A true word, most altcoins are used either for low fees/fast  or because of speculation and therefore they are subject to contributions and are rarely used for payments> even currency developers are looking for how to add it to platforms and not for daily use.

I see a very optimistic, so he might describe the pocket store for value and therefore a different legislative law may be prepared.

[Yogee]

...Gensler has once again emphasized that most of the cryptocurrencies are “investment vehicles”: 
"A lot of these are not real currencies. They are not being used to buy a cup of coffee at Starbucks…Most of them are investment vehicles…They should be within the securities laws."

I agree that many of these cryptocurrencies are used as an investment vehicle but WTF? They fall as securities just because users prefer to store and them rather than spend? He probably did not get the memo that they can be spent at any time as long as there are merchants that accepts them.

[stompix]

He probably did not get the memo that they can be spent at any time as long as there are merchants that accepts them.

And in the case of 99.99% of those coins and tokens there are no such merchants at all and even if they were numbers have always pointed out that poeple are not that keen on actually spending those tokens and altcoins and everything they are doing is either training or holding.
So despite what any memo could say the real-life situation says something different!

Don't tell me everybody is buying moss coin or crust network or dogelon mars or super zero protocol (all are actual names) in order to pay for groceries cause nobody does.

Hester Peirce is also right.The lack of clarity in the regulatory frame is stopping the further development of the cryptocurrency industry.No human or company is going to invest money in an industry that might become illegal tomorrow.

Hester pierce should be called shitcoinmom, what she is after would lead to a new wave of useless tokens that have no purpose, just coins were thrown at the market that at some point don't been reflected the fiances of the project or companies behind it.

Besides, I don't understand why everyone is putting that much emphasis on development being correlated with the legal status of some coins, development in crypto can come without issuing a coin, LN is the clear example of it, you don't need a coin for every single thing, the accent should be put on solutions to integrate those into the current systems, not issuing more.

[joniboini]

Regardless of whether people can use coins to buy groceries or not, throwing anything under security laws is just a bit too much imo. A large number of those tokens bring no value (no profit sharing etc), might as well just tax the project instead of forcing people to agree they are holding some security tokens.

[bL4nkcode]

So basically, the SEC Boss needs more help in understanding how it can regulate cryptocurrencies since it's an investment vehicle hence still security, right?
--snip--

I doubt that he needs any help as financial regulators are generally very smart people. The only problem is that they have to act in the interest of the citadel that finance has built around itself. They also need to find the right balance between trying to prevent people from scams and enabling innovation with a fair ground for everyone.

This. Coz most of the new coin/token/business to be made are mostly made for investment without any mainstream purposes, once the team initially accumulate investment, time past they become shit tokens, or somewhat shit tokens already in the very first place, simply a scam.
And mostly they use eth blockchain tokens which are commonly labeled as securities which Gensler said that those will fall on securities laws generally.

[DapanasFruit]

All of these discussions on how SEC can be able to best define and regulate cryptocurrency am hoping can really lead into something like a regulatory framework that all parties can live by and follow. I am glad that there are also lawmakers who are seeing the big potential of cryptocurrency for innovations and let's see if they can muster enough strength to come up with the desired result that the White House will agree on and approve. This is actually the best time, the best opportunity for USA to lead the cryptocurrency industry as China has finally kicked it out of the country.

[cabron]

All these discussions and SEC dodging questions yet still consider all cryptocurrencies as security is just bureaucracy.
They intend to regulate but found out in reality that they can't regulate because of the nature of the cryptocurrency, if they really want to ban crypto, they could. But FED already announced no banning of it.

What they need is to set another law not just relying on that security law that does not apply to the new technology like crypto. They've found a window where they could really get in and regulate the crypto market and it's with stablecoins that they set their minds which are believed to be the only way they could do it.

[bbc.reporter]

I reckon Gary Gensler is not wrong. Much of these cryptocoins and tokens really are illegal and unlicensed securities that could not pass the howey test. However, where Gensler is wrong is not claryifying where the applies and where it does not. He might be using a tactic similar as China before 2021 hehehe.