In the Congressional hearing, SEC Chairman Gary Gensler admitted that in his opinion Bitcoin cannot be categorised as security
The Congressional Hearing and Gensler’s Position
‘I would say Bitcoin is not a security.’ This is how Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), replied to a specific question coming from congressman Patrick McHenry in a Congressional hearing on September 27. Gensler reiterated his long-held position that cryptocurrency companies could register themselves in a compliant manner but often choose not to. He emphasized that crypto assets could be considered securities since they involve an “investment contract,” a term included in the definition of a security by Congress back in 1933 and 1934.
Gensler’s comments come at a time when the crypto industry is under increased scrutiny from regulators. His remarks indicate a willingness to bring crypto assets under the umbrella of existing securities laws, a move that could have significant implications for the industry.
The Pokémon Card Conundrum
During the hearing, Rep. Ritchie Torres, a Democratic representative from New York, posed an interesting question to Gensler. He asked whether buying a Pokémon card could be considered a security transaction. Gensler responded with a straightforward “no.” However, when Torres elaborated the question to ask if purchasing a “tokenized Pokémon card on a digital exchange via a blockchain” would be a security transaction, Gensler’s answer was less definitive. He stated, “I’d have to know more.”
This exchange highlights the complexities involved in classifying digital assets. While Bitcoin is clearly not considered a security in Gensler’s view, the classification of other tokenized assets, like Pokémon cards, remains a gray area. This ambiguity could have far-reaching consequences for the burgeoning market of non-fungible tokens (NFTs) and other tokenized assets.
The ETF Controversy and Bipartisan Concerns
Another point of contention during the hearing was the SEC’s reluctance to approve a Bitcoin Exchange-Traded Fund (ETF). A bipartisan group of lawmakers, including Rep. Torres, recently sent a letter to Gensler urging the SEC to reconsider its position. They argued that a spot Bitcoin ETF is “indistinguishable” from crypto futures-based ETFs that have already been approved by the SEC. Congressman Tom Emmer also criticized Gensler for “working to consolidate [his] own power” at the expense of financial opportunities for everyday Americans.
