A video of Gary Gensler has emerged stating that most crypto assets are not securities.
The video dates back to 2018 when Gensler was a professor at the Massachusetts Institute of Technology (MIT) teaching a course called “Blockchain and Money.”
As the current SEC Chair, the crypto community has widely criticized his approach to digital asset regulation.
Congressman Emmer labeled Gensler, an “incompetent cop on the beat” for his enforcement actions. Emmer pointed out that Gensler had punished crypto firms for non-compliance — despite failing to provide clear guidelines for them to follow.
Similarly, Ryan Selkis, the founder of Messari, criticized Gensler’s proposed solution of meeting with the SEC and registering — saying it isn’t possible to register with the agency.
“The SEC has *never* issued comprehensive guidance about *how* to register. Only one firm who has gone in is still operating in the US in a meaningful way.“
Why backtrack?
During the Blockchain and Money lecture, Gensler said that — according to the definitions set out in the Howey test or similar tests in other jurisdictions — 75% of cryptocurrencies in the U.S. and many other markets do not qualify as securities
“3/4 of the market is non-securities. It’s just a commodity, a cash crypto.”
The Howey test determines if a transaction qualifies as an “investment contract” and, therefore, a security. The test establishes whether a contract exists in which money is invested with an expectation of profit derived from the work of others.
Before a Senate Banking Committee in September 2022, Gensler testified that most cryptocurrencies meet the definition of a security under the Howey test.
Commenting on Gensler’s opposing stances over time, ShapeShift founder Erik Voorhees asked, “When does someone get arrested for fraud?”
Chiming in, the CEO of Tierion, Wayne Vaughan, asked, “What changed?”
The U.S. crypto industry is “dead”
In a recent interview, tech billionaire Chamath Palihapitiya said U.S. regulators had their guns firmly pointed at crypto.
Considering the recent regulatory developments, he concluded that there is an ongoing, deliberate attempt to outlaw the U.S. crypto industry — effectively banning it and forcing the industry to move offshore.
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