Did Gary Gensler of the SEC threaten encryption and DeFi in the WaPo interview?


Please, Gary Gensler does not threaten the industry. Of course he didn’t, but… maybe he did? If the mafia boss repeats the same thing, there is no doubt about it. We quoted him verbatim. This is exactly what the chairman of the Securities and Exchange Commission told the Washington Post.they have Gary Gensler as a guest in their “Road Ahead” series. The host is David Ignatius. They talked about “Those five or six thousand projects“which is”Raise funds from the public. “

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Yesterday, we focused on Gary Gensler’s comments on stablecoins and Evergrande. Today’s topic is fighting words…or is it? Read what he is going to say and decide for yourself.

Gary Gensler lures cryptocurrency with honey and vinegar

Of course, today’s topic is that cryptocurrencies are securities? The head of the China Securities Regulatory Commission called on exchanges and related platforms, rather than targeting the project itself. Interesting strategy. Gary Gensler explained:

“If these tokens — there are five or six thousand different projects — if these tokens have the attributes of investment contracts or bills, or have the attributes of stocks or bonds. Essentially, one of the core problems is the existence of a platform : A trading platform where you can buy and sell these tokens; a lending platform where you can get a return on these tokens, which not only have dozens of tokens, but sometimes hundreds or thousands of tokens. They It is very likely that these platforms have securities, investment contracts or notes or other that meet the security definition. These platforms should come in, and they should figure out how to register and become the responsibility of investment investor protection.”

Well, good luck to you. Mr. Gensler, what happens if people don’t comply with your organization’s mandate?

“I am really worried that we will continue to bring these law enforcement cases, but there will be problems. There will be problems with the lending platform or the trading platform. Frankly speaking, when this happens, I think a lot of people will be hurt.”

We are not saying that Gary Gensler is threatening you. He was obviously talking about the risks of unregulated markets. However, “There will be problems” with”Many people will be hurt.“That’s what the man said.

Definition of investment contract

Here, Gensler talks directly with host David Ignatius:

“If you, David, ask some listeners of this show to give them your money, something of value. They rely on you, David, and possibly five to ten other entrepreneurs and computer scientists to build a platform— —Build a platform, that token, etc. They give it to you and expect to make a profit. Our Supreme Court said a long time ago that this is an investment contract.”

It’s hard to argue with it. But when you mix it with this, it sounds dangerous:

“So, public funds have a certain status in the world. Private funds usually do not last that long. Therefore, I think that five or six thousand private forms of funds have no long-term viability. History tells us that this is not the case. Therefore, at the same time, I I think it is worthwhile to build an investor protection system around this.”

There is a sentence in the newspaper, “I don’t think five or six thousand private forms of money have long-term viability,” as their headline news. The market crashed. Some people think that in context, the phrase is not that threatening. Maybe, but if you mix it with something like this:

“And I think that out of the $2 trillion, 5 or 6,000 projects, it is best to invest in investor-consumer protection, tax compliance, anti-money laundering, and financial stability.”

A clear picture of the SEC’s intentions and politics emerged.

What does Gary Gensler think of Bitcoin?

According to the Securities and Exchange Commission, Bitcoin is a commodity. Its unique characteristics make it so. In addition, there is Gary Gensler’s respect for Satoshi Nakamoto and the fact that he teaches cryptocurrency courses at MIT. Because of this, Bitcoiners seem to feel that they are free from the SEC’s wrath. Are they?

When the host David Ignatius asked about the effectiveness of Bitcoin as a store of value, Gary Gensler replied:

“I mean, holding a highly volatile asset-Bitcoin. This is a digital, scarce, and I can even say it is a speculative store of value. In order to hold appropriate capital, if it On the bank’s balance sheet, this seems to be in line with our past responsibilities, so there are appropriate shock absorbers to deal with potential losses.”

This does not sound like a fan of Satoshi Nakamoto. Or as if he fully appreciates Bitcoin. Frankly, what do you think of Bitcoin as an innovation, Mr. Gensler?

“I think this is a catalyst for change. Nakamoto-san’s innovation is not only Bitcoin as the first type, but the entire distributed ledger technology has always been a catalyst for change. Central banks and private sectors around the world are studying how to strengthen us. And enhance our payment system to make it run in real time 24 hours a day, 7 days a week, and at a lower cost.”

He did everything but said “blockchain, not Bitcoin”. This slogan may have been eliminated, but obviously, the idea still exists. This is actually what Gary Gensler, who supports cryptocurrency regulators, believes Bitcoin has brought to the world. A catalyst for increased competition between the central bank and the private sector. Wow.

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BTC price chart for 09/23/2021 on Bitstamp | Source: BTC/USD on TradingView.com

What is his position on decentralized lending?

You won’t believe what this person thinks of DeFi loans. According to Gary Gensler:

“It puts forward new and interesting innovations around the way exchanges operate and the potential for certain forms of decentralized lending. We have been P2P lending for 15 to 20 years, and we have been experimenting with it. This is one This is a new type of experiment. So, I think these are really interesting innovations that challenge established business models.”

Oh. This is actually a fair description of this phenomenon. It’s ok. continue.

Featured Image: Screenshoot from video interview | Charts by TradingView





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