🚀 Gensler Drops Truth Bomb on Crypto: It’s More Like Gold Than Cash
posted 10 Oct 2024
On October 9, 2024, SEC Chairman Gary Gensler spoke at an event at the New York University School of Law in Manhattan. Once again, he took the opportunity to lay out the familiar crypto concerns that the SEC, under his leadership, has been raising for years.
Gensler voiced serious doubts about the potential of cryptocurrencies to replace traditional money, stating that Bitcoin and other digital assets are more akin to gold—a store of value rather than a mainstream payment method.
He also took a swipe at crypto industry leaders, sarcastically noting: "With all respect, the leading lights of this field are either in jail or awaiting extradition right now." This was likely a reference to figures such as Do Kwon and Sam Bankman-Fried. However, many are aware of his selective approach—founders of successful crypto exchanges have been calling for clear regulations and transparency from the SEC for some time.
"Will cryptocurrency become the primary means of exchange? It is unlikely," Gensler said during his speech. "Historically, societies have always strived to have a single currency within a specific economic zone. This is a natural process that has been ongoing for thousands of years."
Gary Gensler. Source: noworries
Gensler also compared the current situation with cryptocurrencies to Gresham's Law, the economic principle that "bad money drives out good." According to Gensler, this means that when two currencies are in circulation, people are more likely to use the less stable but more convenient option.
Let’s officially note: Gensler admitted that Bitcoin beats the dollar in convenience.
Gensler emphasized that he isn’t against innovation but insists that participants in the crypto market comply with existing laws. "We cannot allow investors to lose their funds through fraudulent schemes," he said.
The highlight of his speech came when he declared that without a cop on the beat, no laws would be followed, as it goes against human nature. He sees his role as ensuring that people remain within legal boundaries.
As for cryptocurrencies, Gensler reiterated that the debate over whether they are securities is irrelevant. The guiding standard he continues to rely on is the Howey Test, established back in 1940. He stressed that the criteria set out in this test are more than sufficient to determine the legal status of cryptocurrency tokens, particularly in how they are distributed.
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