In a recent interview with CNBC on September 26, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler reiterated the agency’s position that Bitcoin is not a security. This is not the first time the SEC has expressed this view, as previous official filings have classified Bitcoin as a commodity rather than a security. However, Bitcoin remains an exception, as the majority of other cryptocurrencies continue to face stringent scrutiny from the SEC.
Innovation and investor protection are complementary.
I was happy to join @SquawkCNBC this morning to discuss the capital markets.
Watch: https://t.co/iAO9hwZtpp
— Gary Gensler (@GaryGensler) September 26, 2024
Gary Gensler emphasized that Bitcoin does not meet the criteria outlined in the Howey Test, a legal framework used by the SEC to determine whether an asset qualifies as a security. According to Gensler, Bitcoin is not involved in public capital raising or based on the expectation of profits from a third party, which are essential conditions for an asset to be classified as a security.
In addition to highlighting Bitcoin’s status as a non-security, Gensler continued to criticize the cryptocurrency industry for regulatory non-compliance. He stated that many crypto projects and exchanges fail to provide sufficient transparency and violate investor protection regulations. He cited the major bankruptcies of 2022, including FTX, Three Arrows Capital, and Celsius, as evidence of the need for stricter regulations and oversight in the sector.
According to Gensler, many cryptocurrency projects rely on public interest to raise capital but fail to provide investors with adequate information. This undermines trust and increases the risk of fraud and losses for participants.
Gensler has encouraged users to invest in Bitcoin through exchange-traded fund (ETF) products, which the SEC approved earlier this year. He stressed that without robust investor protections, the cryptocurrency sector would struggle to survive long-term and gain broader acceptance.
While the SEC has approved several Bitcoin ETFs, it remains unclear about Ethereum, the world’s second-largest cryptocurrency. Although Bitcoin is classified as a commodity, the SEC has launched multiple investigations and enforcement actions against entities supporting Ethereum trading, such as Consensys and Uniswap. However, the agency has yet to definitively classify Ethereum as a security.
Related news: SEC Forces Solana ETF Proposals to Withdraw
