In the US, members of the House Financial Services Committee held the SEC Chairman Gary Gensler for five hours in a hearing to talk about crypto classification and the agency’s work.
For Gensler, Bitcoin is not a security, but tokenized Pokémon cards could be.
Gensler and crypto classification: Bitcoin is not a security, Pokémon cards maybe so
Yesterday, Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), was the subject of a hearing that lasted nearly five hours to talk about crypto classification and the agency’s work.
He was convened by lawmakers, namely members of the House Financial Services Committee from both sides of the aisle.
Gensler chose to address the issue of digital assets in his opening statement, reiterating a position he has maintained throughout his tenure: cryptocurrency companies are able to register themselves in a compliant manner, they just don’t want to.
Here are the SEC Chairman’s words on crypto companies:
“There is nothing about the crypto asset securities markets that suggests that investors and issuers are less deserving of the protections of our securities laws. Congress could have said in 1933 or in 1934 that the securities laws applied only to stocks and bonds. Yet Congress included a long list of 30-plus items in the definition of a security, including the term ‘investment contract’.”
In essence, for Gensler, crypto assets could be securities since they involve an investment contract.
Gensler and Rep. Torres’ provocation on Bitcoin and Pokémon cards
Rep. Ritchie Torres, D-N.Y., also spoke at the hearing, asking Gensler whether or not an “investment contract” requires an actual contract.
The SEC Chairman responded with a quote from former Supreme Court Justice Thurgood Marshall on the vagueness of congressional definitions.
At this point, Torres responded more directly as follows:
“I do not go to MIT, but in the Bronx, if I ask whether any investment contract includes a contract, the answer is typically yes or no.”
Not only that, the Democratic representative also asked Gensler if buying a Pokémon card was a security, the SEC chief replied no. Then, Torres continued with this more articulate question:
“If I were to purchase a tokenized Pokémon card on a digital exchange via a blockchain? Is that a security transaction?”
Gensler replied, “I’d have to know more”
That is why while on Bitcoin, Gensler has no doubt that it is not a security, for the tokenized Pokémon card as described by Torres, on the other hand, there is a possibility that it could be.
The Bipartisan Letter on the SEC’s reluctance to approve an ETF on Bitcoin
Recently, the SEC officially postponed its decision on whether to approve the ETF on Bitcoin proposed by Cathie Wood’s Ark Invest.
Hence, a bipartisan group of lawmakers sent a letter to Gensler, asking the agency to reconsider its position on approving ETFs on Bitcoin.Among the co-signers is Representative Torres.
In the letter, the four Financial Services Committee members argue that a spot Bitcoin ETF is “indistinguishable” from crypto futures-based ETFs already approved by the SEC. Therefore, the bipartisan group is demanding that the SEC approve the bitcoin ETFs requested by Fidelity, BlackRock’s iShares and Grayscale Investments.
Soon after, during the five-hour hearing, Congressman Tom Emmer, R-Minn, also told Gensler the following:
“It’s clear that you are working to consolidate your own power even though it means crushing opportunities for everyday Americans and frankly the financial future of this country.
Even the federal courts are highlighting the damage you, sir, are doing to our constituents, and they’re telling you that you don’t have the legal authority to accomplish your goal of squashing competition in the financial markets.”
Source: https://en.cryptonomist.ch/2023/09/28/gensler-bitcoin-not-security-pokemon-cards-perhaps/