Gensler’s approach to crypto may have been warmer in 2018, but Crypto Twitter was quick to observe that Ether in 2018 isn’t the same as Ether today.
SEC Chair Gary Gensler may be cracking down hard on the US crypto industry, but a newly surfaced video dating back to 2018 reveals that his views haven’t always been so hostile.
Speaking at a Bloomberg conference in NYC in 2018, Gensler said, “Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities.”
Just last week, the SEC filed a major lawsuit against crypto exchange Binance for alleged violations of securities laws, among other serious charges. The SEC now views more than 60 cryptocurrencies as ‘securities’, including BNB, BUSD, SOL, ADA, MATIC, ATOM, SAND, MANA, AXIS and COTI.
The implication of listing swathes of tokens as securities is that exchanges very quickly fall into non-compliance, which can have catastrophic consequences on businesses. While registering with the SEC may have some benefits, such as investor protection, it would result in much closer centralised oversight and potential trade restrictions, which many believe goes against the entire ethos of cryptocurrencies as decentralised, borderless stores of value.
Binance maintains that BNB is not a security, stating that BNB is “a native token, designed to create an internal economy; thus, its value derives from its participants.”
Gensler was a professor at the Massachusetts Institute of Technology (MIT) at the time the video was recorded. He joined the SEC as Chair in 2021, following appointment by President Biden.
Crypto Twitter was quick to point out that Ether today is not the same as Ether in 2018, when the network was exclusively proof-of-work. Since transitioning to proof-of-stake in 2022, ETH investors have been able to earn staking rewards by locking their tokens in the network, contributing to the security and operation of the blockchain while earning additional tokens as a reward.
A glassnode researcher who uses the Twitter handle ‘CryptoVizArt’ tweeted, “Sir, ETH 2018 is not the same ETH we have today. By the move to PoS, and having a consensus layer made of validator who are expecting an earning, ETH is INDEED a security.”
In the ongoing SEC v. Binance lawsuit, Binance’s lawyers claimed that Gensler offered to serve as an adviser to Binance in 2019. A few months earlier though, the WSJ reported that Binance approached Gensler first, and that Gensler rejected various offers from a range of companies including Binance.
In either case, the SEC stated weeks ago that the views of single Commissioners do not necessarily reflect the views of the Commission as a whole.
The SEC v. Binance lawsuit is ongoing, but it doesn’t look good for Binance. One former SEC official strongly believes that the Department of Justice may have already filed a criminal indictment against the exchange, citing a “litany” of indicators.
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