According to Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), Bitcoin is a commodity. He highlighted that the SEC, the CFTC, and banking regulators would work together to oversee the cryptocurrency industry.
In a conversation with Mad Money presenter Jim Cramer on CNBC on Monday, SEC Chairman Gary Gensler addressed his views on cryptocurrencies, particularly bitcoin.
“This asset class is very speculative. When asked about cryptocurrencies, Gensler stated, “We’ve known this for a long time.” He explained that when individuals invest in “bitcoin and hundreds of other crypto tokens,” they aspire for a return, “much like when they invest in other financial assets” that are securities, citing the “ups and downs of this speculative asset class.”
According to Chair Gensler, many of these “crypto-financial assets” contain “the essential characteristics of a security.” “Some of them,” he continued, “are regulated by the Securities and Exchange Commission.” He described the following, in contrast to his predecessors and others:
“Some, like bitcoin, and that’s the only one I’m going to say … are commodities.”
About other cryptos
The SEC chairman said that aside from bitcoin, he will not specifically discuss other digital tokens.
Gensler’s assertion concurs with Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), who declared both Bitcoin and Ethereum commodities.
The reaction of the crypto market participants
Supporters of bitcoin applaud Gensler’s clarification. “Gensler is the 2nd consecutive SEC Chair to declare that #Bitcoin is a commodity making it all but impossible for this classification to be altered in the future. Very significant indeed,” tweeted digital asset manager Eric Weiss.
According to Michael Saylor, the pro-bitcoin CEO of Microstrategy, bitcoin is a commodity that is necessary for any treasury reserve asset. Politicians, organizations, governments, and institutions may now embrace bitcoin as a technology and digital asset that will expand everyone’s access to property rights and freedom while also helping the economy flourish. The software company listed on the Nasdaq has collected 129,218 bitcoins for its corporate treasury.
Banking, CFTC, and SEC Regulators Work Together on Crypto
Gensler continued by commenting on how the SEC works with the CFTC and banking regulators to supervise the crypto industry. He pointed out that many crypto coins are currently attempting to operate in a non-compliant manner.
On the topic of stablecoins, the SEC chair commented:
“There’s work to be done there around stablecoins … There’s a lot of work to be done to really protect the investing public.”
Gensler suggested “one rule book” for regulating the cryptocurrency industry last week.
Cramer brought up Fidelity Investments’ intention to let bitcoin be an option for 401(k) plans during the interview on Monday, a move that has alarmed the Labor Department. People “feel quite comfortable with the asset that is bitcoin,” according to Mad Money host. “Are we too comfortable with bitcoin?” he questioned Gensler.
Gensler answered there’s a lot of danger in crypto, and there’s also a lot of risk in traditional securities markets.
“In the U.S… we have market regulators like the CFTC and the SEC to help protect the public against fraud and manipulation in the markets.”
According to Gensler, thousands of crypto tokens on the market are illegal. He stressed that there must be “full and fair disclosures” when a group of businesspeople sells something to the general public. “That’s what the SEC does,” the chairman emphasized. “That’s what we do really well.”
