Over the last weekend, there was a strong talk in the crypto circle that SEC Chair Gary Gensler might declare all other cryptocurrencies, except Bitcoin, a security. The U.S. Securities and Exchange Commission (SEC) has been going hammer and tongs after digital assets, especially after the collapse of the crypto exchange FTX.
The desire of the SEC to regulate the crypto market has been amplified by manifold times recently. In a story last week, the New York Magazine author Ankush Khardori explains his recent encounter with SEC Chair Gary Gensler.
He noted that the SEC believes every crypto transaction falls under SEC jurisdiction except for the spot Bitcoin transactions. Gary Gensler said that every other crypto project except for Bitcoin has a website with a group of entrepreneurs setting up their legal entities in offshore tax havens.
Basically, what Gensler meant was that entrepreneurs are promoting their tokens while enticing investors. The SEC Chair added:
“They might drop their tokens overseas at first and contend or pretend that it’s going to take six months before they come back to the U.S. But at the core, these tokens are securities because there’s a group in the middle and the public is anticipating profits based on that group”.
Gensler says that crypto investors hoping to profit based on the efforts of those intermediaries are very much similar to stockholders in public-listed companies waiting to see their investments grow. Thus, he believes that legally these transactions should fall in securities and within SEC’s jurisdictions.
Crypto Lawyer Objects to SEC’s Call
Popular crypto lawyer Jake Chervinsky has come lashing out at the SEC stating that they lack the authority to regulate digital assets. He wrote: “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”.
Some Bitcoin proponents, however, are taking this opportunity to push BTC adoption among the masses. Commenting on this, Bitcoin maverick Michael Saylor wrote: “Consensus is building that everything in the Crypto industry other than Bitcoin is a security, destined to be regulated by the @SECGov. This makes $BTC the only crypto-asset suitable for use as global money”.
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