SEC chairman facing criticism over his statement “Bitcoin is only security”

Recently many lawyers criticised Gary Gensler over his statement that all Cryptocurrencies are Securities, except Bitcoin. 

Gary Gensler is Chairman of the United States Securities and Exchange Commission (SEC). Initially in 2021, when Gensler joined the SEC agency, people were considering him a crypto-friendly person but that was a mistake because Gensler took many actions against fair business focussed crypto companies over the last two years. 

On 23 Feb 2023, During a New York Magazine interview discussing crypto, the SEC chairman said that all the cryptocurrencies other than Bitcoin are Securities because behind all such crypto assets, there is a dedicated group on which people depend to make a profit. 

Gensler in @NYMag on crypto:

-everything is a security except bitcoin
-every company out there is in violation
-crypto is pointless but blockchain is kinda neat

Hard to argue you’re acting in good faith if admittedly trying to stamp out an entire industry. pic.twitter.com/Ozw8ZJ3ETO

— Alexander Grieve (@AlexanderGrieve) February 26, 2023

In short, Gensler declared all the cryptocurrencies as security assets, including Ethereum (ETH) which was not a security as former SEC officer William Hinman clearly said that Ethereum was not a security. 

In the last couple of days, many US attorneys & law experts shared their opinion against Gensler. 

Jake Chervinsky, a lawyer and policy lead at the crypto advocacy group Blockchain Association, said that Gensler’s statement or opinion can’t be considered law. 

Chair Gensler may have prejudged that every digital asset aside from bitcoin is a security, but his opinion is not the law. The SEC lacks authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time.

— Jake Chervinsky (@jchervinsky) February 26, 2023

Lawyer Logan Bolinger noted that court judges will decide which laws will be applicable & which not and these are outside the authority of the SEC chairman. But he also noted that we should not consider Gensler’s statement irrelevant.

Friendly reminder that Gensler’s opinions on what is or isn’t a security are not legally dispositive.

In this country, judges – not SEC chairs – ultimately determine what the law means and how it applies.

Doesn’t mean his thoughts are irrelevant. They’re just not dispositive.

— Logan Bolinger (@TheWhyOfFI) February 26, 2023

Jason Brett, the policy lead at advocacy body Bitcoin Policy Institute, also noted that the latest statement passed by Sec chairman was fear and many crypto companies are under stress but he noted that cryptocurrencies code can be changed at any time, which means no one rule can force directly any cryptocurrencies for the long run.

The Gary Gensler thing is no bueno. There are ways to win other than via a regulatory moat. And anytime this is the way, the script can be flipped and before you know it, everyone is crying due process. Gensler's comments in NY Magazine shouldn't be celebrated, but feared.

— Jason Brett (@RegulatoryJason) February 26, 2023

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