• US SEC Chair Gensler reaffirms Bitcoin (BTC) is not a security under current regulations.
• SEC plans new regulations for DeFi and trading systems to protect investors.
• Crypto firms, including Coinbase, push back against expanding regulatory scope.

In recent statements, SEC Chairman Gary Gensler has firmly reiterated that Bitcoin is classified as a non-security under existing SEC regulations. His comments came during an interview on CNBC’s “Squawk Box.”

Gensler emphasized the importance of regulatory clarity, insisting that while many firms have benefitted from the public’s growing interest in cryptocurrencies, they often resist the regulations designed to ensure market integrity.

In the interview, Gensler noted that the SEC’s role is to foster trust in the market, stating, “Innovations do not develop in the long term unless they also build trust.” He referenced the significant losses and bankruptcies that have occurred in the crypto space, underscoring the necessity of having regulations in place to protect investors.

Despite Gensler’s reaffirmation regarding Bitcoin, he acknowledged the discontent among crypto firms concerning regulatory frameworks. He highlighted that many industry stakeholders argue against the existence of such regulations, which he attributes to their discomfort with the enforcement actions taken by the SEC.

Notably, Gensler’s remarks follow the recent eToro settlement, which confirmed that Bitcoin (BTC), along with Bitcoin Cash (BCH) and Ethereum (ETH), are not considered securities.

SEC’s trading systems proposal

In the interview, Gensler indicated that the SEC is working on new regulations for decentralized finance (DeFi), suggesting a potential shift in oversight for various trading platforms.

Earlier Gary Gensler while testifying before the US House Financial Services Committee discussed the SEC’s ongoing proposal to mandate that alternative trading systems register as brokers. This proposal aims to close regulatory gaps among trading platforms, ensuring compliance with rules intended to prevent unfair trading practices.

However, the proposed regulations have met significant push-back from digital-asset firms, including Coinbase, which argue that the definition of an exchange could inadvertently include DeFi platforms, complicating their compliance.

As the SEC continues to navigate the complex landscape of cryptocurrency regulation, Gensler reiterated the agency’s commitment to fostering a transparent market.

With no timeline set for final decisions on the trading systems proposal, the SEC remains open to considering applications from exchanges seeking to offer central clearing for the US Treasury market, which is projected to expand significantly under new rules.

The US Securities and Exchange Commission (SEC) Chair Gary Gensler has asserted that crypto regulations exist in the United States. He insinuated that stakeholders in the crypto industry do not like these regulations, which is why they claim they do not exist. Meanwhile, Gensler affirmed that Bitcoin is not a security.

Gary Gensler Says There Are Crypto Regulations

The SEC Chair mentioned during an interview on CNBC that crypto regulations exist in the United States. He added that “not liking the rules is not the same as, there aren’t rules,” alluding to industry stakeholders who continue to demand regulatory clarity in the country.

Gary Gensler remarked that many firms profited from the public’s interest in crypto without proper disclosures. The SEC Chair also raised the “classic securities” case of how many of these firms are raising money, which brings such situations under the Commission’s purview since they are concerned with investor protection.

His comments come following the SEC Congress hearing in which he and the five Commissioners appeared before the US House Financial Services Committee. Rep Patrick McHenry claimed that the Commission needed to focus on capital formation and providing crypto stakeholders with clarity rather than “taking ad hoc action to sue people and make headlines.”

Meanwhile, Coinbase recently appealed the SEC’s denial of its 2022 rulemaking petition. The exchange is one of the crypto stakeholders that has continued to pressure the Commission to provide a clear legal framework for the industry.

Bitcoin Is Not A Security

Gary Gensler stated during the interview that Bitcoin is not a security. He noted that this is a view he and his predecessor Jay Clayton have shared right from the onset. Gensler and the SEC’s view that Bitcoin isn’t a security is what easily led to the launch of the Spot Bitcoin ETFs in January earlier this year. Although Gensler didn’t comment about Ethereum, the second-largest crypto token by market by cap is also belived not to be a security.

The SEC’s approval of the Spot Ethereum ETFs indicated that the Commission considers ETH as a commodity just like Bitcoin. Meanwhile, the regulator had for a while now referred to several altcoins as securities. However, in a recently filing in its case against Binance, the SEC stated that it regrets the confusion it has caused with classifying crypto assets as ‘crypto asset securities.’

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Boluwatife Adeyemi

Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across DeFi, NFTs, smart contracts, and blockchain interoperability, among others. Boluwatife has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover and a part-time degen.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.