Gary Gensler (SEC) shakes up bitcoin
Gary Gensler (SEC) shakes up bitcoin

Gary Gensler (SEC) shakes up bitcoin

By Eleonora Spagnolo - 3 Aug 2021

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The Chairman of the SEC, Gary Gensler, has issued a warning towards bitcoin and cryptocurrencies

One of his statements reported by Bloomberg reads:

“While I’m neutral on the technology, even intrigued—I spent three years teaching it, leaning into it—I’m not neutral about investor protection. If somebody wants to speculate, that’s their choice, but we have a role as a nation to protect those investors against fraud”.

These words are a prelude to possible regulation of the sector. The SEC has not intervened much in the crypto sector at the moment, leaving plenty of room for growth. However, it has not been insensitive to cases where investors have been scammed into investing in failed projects. The authority also remained neutral (not to say opposed) to the approval of Bitcoin ETFs, which were never launched due to BTC’s volatility. 

During his first appearance before Congress in recent months, the SEC chairman had pointed out that the authority was not currently in a position to intervene against exchanges. On the contrary, he said he could not intervene when it came to bitcoin, which is considered a commodity and not a security: 

“Right now the exchanges do not have a regulatory framework. There’s a lot of authority that the SEC currently has in the securities space and there are a number of cryptocurrencies that fall within that jurisdiction. But there are some areas, particularly Bitcoin trading on large exchanges, that the public is not currently really protected”.

The latest statements confirm his intention: regulation is needed so that consumers are protected. According to him, by giving more guarantees, the crypto market could experience wider adoption and diffusion.

This news comes just days after it was revealed that a bill for the sector has been introduced in the US Congress. However, the bill in question (which some say is supported by Janet Yellen herself), “only” addresses the regulation of cryptocurrencies and stablecoins, but not exchanges. 

Bitcoin’s reaction to the words of chairman Gary Gensler

Gary Gensler’s words must have rattled bitcoin. Indeed, BTC today lost almost 3% and returned below $39,000. This reversal comes after positive days in which the queen of cryptocurrencies broke out of the sideways channel between $30,000 and $35,000, reaching above $42,000. 

And that may not be the end of it. Just today, the chairman of the SEC is expected to speak at the Aspen Security Forum. It is to be expected that he will speak again on crypto regulation. After that, all that remains is to see how the market reacts.

Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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