In February, President Joe Biden nominated Gary Gensler as the new chairman of the US Securities and Exchange Commission (SEC), who was confirmed on April 19.
In the past, Gensler has discussed cryptocurrency regulation on a number of occasions, taught a course on blockchain at MIT, and has given interviews on digital assets several times this month. Since the SEC is heavily dependent on financial regulators’ perception of Bitcoin and other coins, Gensler’s future guidance will play an important role here.
What will be the policy of the new head of the Commission?
Consumer Protection, Bitcoin ETF and DeFi
Gensler is taking a proactive stance on consumer protection in the cryptosphere, as can be understood from just one of this quote from his interview. The official’s reply is quoted by Decrypt.
We are the investment protection authority. Right now, this asset class – Bitcoin and hundreds of other coins that investors trade – are speculative. We want to provide at least basic protection against fraud and manipulation.
That is, in this case, the head of the Commission focuses precisely on the need to protect inexperienced investors who interact with digital assets for the first time. It sounds logical. Still, taking into account the peculiarities of the work of decentralized assets, it is quite easy to lose cryptocurrency.
At the same time, investors should be protected not only from fraudsters, but also from DeFi – Gensler is confident that many decentralized finance protocols currently operate as unregistered securities. Specifically referring to «decentralized financial platforms» during his speech at the Aspen Security Forum, Gensler noted that these coins «may be subject to regulation as exchange commodities or even banking products. «
Initially, Gensler’s appointment to the post was greeted with optimism by crypto enthusiasts, as many expected the new head of the SEC to approve Bitcoin ETFs very quickly. Perhaps this opinion was formed after the former assistant to the President of the United States for communications Anthony Scaramucci said in March that under the leadership of Gensler, the SEC will adopt an ETF «this year. «
However, almost half a year has passed since this statement, and there is still no progress on the existing problem. Moreover, in June, Gensler made it clear in one quote that ETF approval would have to wait. Here is this line.
I am talking about my thoughts in the sense that there is no reliable control over the turnover of finance in the crypto market, which is carried out in the stock market or in the derivatives market.
Moreover, the chairman of the Commission does not consider cryptocurrencies to be money, which he also announced earlier.
No crypto asset fulfills all the functions of money.
We assume that in this case, Gensler was referring to the operation of digital assets as a means of payment, which is difficult to carry out due to constantly changing fees. In addition, sometimes the cost of transfers is too high: on April 21, on the Bitcoin network, the average price of interaction with the BTC blockchain was the equivalent of $ 62. Naturally, in such conditions, it is quite difficult to pay with crypts on constant terms.
But the crypt is great for the growth of crime financing, says Gensler. In his opinion, this also includes the increased activity of hacker groups that attack their victims using ransomware, demanding to carry out cryptocurrency transactions as a ransom.
We believe that this accusation is not fair. Nevertheless, hackers were active even before the advent of cryptocurrencies, so digital assets clearly did not become the cause of the current situation in the world. However, the decentralized nature of the crypt has made it easier for scammers anyway.
In general, we can conclude that the Securities and Exchange Commission will continue to treat cryptocurrencies with caution in the future. This has a noticeable plus – the new strategy of the regulator is aimed at protecting investors, while it will try not to «stifle» innovation with too many bans. So far, everything is going well for the rapid development of the industry. I would like to believe that in the future what is happening will not change in any way.