REGULATIONBITCOIN

Regulatory Boost | SEC's new chairman Gary Gensler: Bitcoin and other cryptocurrencies are a catalyst for innovation

share
Regulatory Boost | SEC

The newly appointed chair of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, known for his tough regulatory stance, held his first hearing today. Bringing a sigh of relief to the cryptocurrency industry, he views cryptocurrencies such as Bitcoin as a new innovation catalyst, but also acknowledges the emerging investor protection issues.

SEC's New Chairman Gary Gensler

After serving for three and a half years, former Chairman Jay Clayton stepped down, and reports speculated that Gary Gensler, nominated by Biden, would succeed him. Here is a brief overview of his background:

  • 1979 – 1997: 18 years at Goldman Sachs
  • 1997 – 1999: Assistant Secretary of the Treasury for Financial Markets
  • 1999 – 2001: Under Secretary of the Treasury for Domestic Finance
  • 2009 – 2014: Former Chairman of the Commodity Futures Trading Commission (CFTC)
  • 2016: Chief Financial Officer for Hillary Clinton's presidential campaign
  • Teaches blockchain technology, digital currencies, finance, and public policy at MIT

Involved in the Creation of the Sarbanes-Oxley Act and Dodd-Frank Act

During the formulation of the Sarbanes-Oxley Act (SOX) in 2002, also known as the Corporate Reform Act, Gensler served as a senior advisor. The act, which was considered too stringent, significantly increased financial auditing costs.

Subsequently, Gensler served as the Chairman of the CFTC during Obama's administration from 2009 to 2014. He was also a key player in the Dodd-Frank Act and actively participated in the post-2008 financial crisis rebuilding efforts.

Gary Gensler: Focused on Promoting Innovation

Earlier today, the Senate Banking Committee held Gensler's first confirmation hearing. He slightly avoided specific SEC policies regarding cryptocurrencies and echoed the SEC's previous stance on the nature of crypto assets, stating, "Bitcoin is not within the SEC's jurisdiction." He mentioned:

When teaching these subjects at MIT, I believe that Bitcoin and other cryptocurrencies bring new ideas for payments and financial inclusion. I will collaborate with other committees to promote innovation. However, this also raises investor protection issues. For example, if an asset falls under securities, it should be regulated by the SEC.

Ethereum and Ripple Considered Securities

In 2018, Gensler was invited to participate in a blockchain summit, where he explicitly stated that the cryptocurrency market is highly volatile. He categorized Ethereum and Ripple as securities and shared his views on blockchain technology:

Bitcoin is the first and most popular cryptocurrency, and cannot be classified as a security. Bitcoin was created as an incentive for verifying a distributed platform through mining rewards. It has no pre-mining, no ICO, and is not a company, which sets it apart from others like Ripple, which appears very much like a company.

Click here for the full confirmation hearing link