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New SEC Chairman Gary Gensler Confirms A Lot Of Cryptocurrencies 'Are Indeed Securities,' Paving The Way For New Legislation

May 7, 2021 2:18 pm
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New SEC Chairman Gary Gensler Confirms A Lot Of Cryptocurrencies 'Are Indeed Securities,' Paving The Way For New Legislation

Gary Gensler, the new chairman of the Securities and Exchange Commission, believes that more regulation is required in crypto markets.

What Happened: In an interview with CNBC on Friday, Gensler said that “greater investor protection” in the realm of cryptocurrencies was the need of the hour.

“To the extent that something is a security, the SEC has a lot of authority. And a lot of crypto tokens — I won’t call them cryptocurrencies for this moment — are indeed securities,” he said.

Drawing attention to the enforcement actions brought by his predecessors, Gensler indicated that he was in favor of bringing these “securities or investment contracts” back into the rules.

While his statements are good news for XRP issuer Ripple, which is currently fighting the SEC’s allegations of XRP token offering being unregistered securities offering, some cryptocurrencies like Bitcoin (CRYPTO: BTC) are definitely in the clear.

With respect to Bitcoin in particular, Gensler noted that the value of the leading digital asset accounted for more than half of the $2 trillion-dollar asset class that is cryptocurrencies.

“It’s a digital, scarce store of value, but highly volatile, and there’s investors that want to trade that, and trade that for its volatility, in some cases just because it is lower correlation with other markets. I think that we need greater investor protection there.”

Gensler, who taught the course “Blockchain and Money” at MIT, has been viewed by many in the crypto community as someone who recognizes the potential of digital assets.

See also: What Gary Gensler's Confirmation As SEC Chair Means For Crypto Industry

Despite his concern about the lack of regulation in crypto markets, he also stated that Bitcoin is a “speculative store of value” and the SEC should be technology-neutral when evaluating innovations in markets.

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