Headline: Gary Gensler’s 2018 Video on Cryptocurrencies Resurfaces, Crypto Community Calls Out Alleged Hypocrisy
The head of the United States securities regulator, Gary Gensler, is being called out by the crypto community after a 2018 video of him surfaced, stating that cryptocurrencies are not securities. In the video, Gensler, who was an MIT professor at the time, taught a “Blockchain and Money” class where he discussed the topic of initial coin offerings (ICOs) and whether they triggered U.S. securities laws.
Gensler’s Stance on Cryptocurrencies and ICOs in 2018
Gensler believed that most ICOs did not trigger U.S. securities laws, stating that “three-quarters of the market are not ICOs or not what would be called securities.” He further added that cryptocurrencies were on par with commodities or cash and were not securities. Gensler named the U.S., Canadian, and Taiwanese markets as the “three jurisdictions that follow something similar to the Howey test.” However, Gensler briefly acknowledged that ICOs may spark a securities debate, but concluded that “three-quarters of the market is not particularly relevant as a legal matter.”
Reaction of the Crypto Community
Several members of the crypto community expressed their surprise and disappointment at Gensler’s remarks. Coinbase CEO Brian Armstrong simply commented “Wow” on a Twitter post shared by cryptocurrency researcher “zk-SHARK.” Erik Voorhees, the founder of crypto trading platform ShapeShift, questioned when someone would be arrested for fraud, while Farokh Sarmad, the founder of Web3 podcast Rug Radio, called Gensler “disgusting” on Twitter. A systems engineer named “JD” called on the SEC Chair to provide an explanation behind the change in opinion.
Contrasting Opinions
While some members of the crypto community criticized Gensler’s remarks, others disagreed. U.S. lawyer Preston Byrne explained that Gensler’s views as a professor should not be held against him as a law enforcer. However, blockchain technology specialist Jonathan Schmalfeld challenged Byrne’s opinion, stating that Gensler’s interpretation of the Howey test should not change by virtue of his capacity. Byrne responded that Gensler’s position limited him to giving only one answer, which is what he thinks the law is.
Conclusion
The resurfacing of Gensler’s 2018 video on cryptocurrencies and ICOs has sparked a debate in the crypto community. While some criticize his apparent change of opinion, others defend his right to do so as a law enforcer. Only time will tell how Gensler’s views will affect the regulation of cryptocurrencies and ICOs in the United States.
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