In 2018, Gary Gensler, then-head of the SEC, described three-quarters of the cryptocurrency market as ‘not securities’. Coinbase CEO Brian Armstrong commented on the old video with a single word — ‘wow’.
— Brian Armstrong ?️ (@brian_armstrong) April 26, 2023
In February, Gensler again hinted that all cryptocurrencies, other than Bitcoin, could be deemed securities. Later he conceded that this status applies to all tokens on the consensus algorithm Proof-of-Stake. The regulator brought claims on this basis against staking services staking Kraken and Coinbase.
During a lecture in MIT’s course «Blockchain and Money» at the Massachusetts Institute of Technology (MIT), which Gensler taught in 2018, he stated that most cryptocurrencies are commodities.
«So, we already know that in the United States and in many other jurisdictions that use something akin to the Howey Test, three-quarters of the market are not Initial Coin Offering or what could be called securities […]. It’s simply a commodity, cash cryptocurrency», — says the SEC chairman in the excerpt.
Yet the context of the lecture suggests that Gensler had Bitcoin and Ethereum in mind for much of the market. At the time of writing, the combined share of the two largest cryptocurrencies in sector-wide market capitalization stood at about 63.7% (CoinGecko).
In the video’s comments, some noted that in 2018 many coins, such as governance tokens, simply did not exist.
The clip’s uploader, using the handle ZK_shark, told Armstrong that he has more than 100 fragments from Gensler’s course and is ready to share them with the company.
«I marked them because they present conflicts of interest or are incompatible with his recent congressional testimony», wrote ZK_shark.
@brian_armstrong I have 100+ more time stamps from his other lectures (24 videos in this course) I marked that present conflicts of interest or inconsistent with his recent congressional testimony.
Tell your team to slide in my dms, happy to help ?
— zk-? (@ZK_shark) April 26, 2023
In February, the head of Coinbase said he was prepared to defend the staking program in court.
One user drew attention to Gensler’s remarks on Ripple’s XRP from Ripple. In December 2020 the SEC filed suit against the fintech company, accusing it of selling unregistered securities in the form of a token.
In the clip, the future head of the regulator says that XRP is likely to become a bridge currency.
Here’s Gary the MIT professor commentary on Ripple XRP being a bridge currency in 2018 pic.twitter.com/J1Lq9e5FME
— happenings.nft (@happeningsllc) April 26, 2023
The U.S. Senate approved Gary Gensler’s nomination as chair of the SEC in April 2021. The regulator continues its fight with Ripple, though in recent months a number of experts have expressed doubts about the Commission’s prospects for victory.
The community had already drawn attention to the SEC’s stance under Gensler as inconsistent with his earlier statements.
In the course of the proceedings against the Bittrex exchange, the regulator equated the native token of the Algorand blockchain (ALGO) to a security. However, during the MIT course reading, Gensler stated that the founder of the crypto project Silvio Micali “created an excellent technology with incredible performance, on which you could even deploy Uber”.
Earlier, the Republican majority leader in the U.S. House, Tom Emmer criticised the SEC chair’s approach to regulating cryptocurrencies.
Congressman Warren Davidson announced a bill proposing the removal of Gensler from his post.