SUMMARY

• SEC Chair Gary Gensler reiterated that bitcoin is not a security and noted that investors can now buy ETF products for exposure.
• He declined to comment on Donald Trump’s proposed Bitcoin strategic reserve for the U.S., citing the ongoing election season.
• Gensler emphasized that existing laws give the SEC authority to regulate the crypto market.

SEC Chair Gary Gensler reaffirmed his position that Bitcoin is not a security and emphasized that regulatory clarity as of now exists for the crypto space. In an interview with CNBC, Gensler clarified, “As it relates to bitcoin, my predecessor and I have said, that’s not a security.” He also noted that investors presently have the opportunity to buy into bitcoin through exchange-traded products, saying, “You presently have a way that you can actually express that view—buy into that through exchange-traded products.” This approval of bitcoin ETFs by the SEC in January stamped a major move in the agency’s approach to cryptocurrencies.

When CNBC’s Joe Kernen inquired if Gensler was “warming up to top-tier crypto,” Gensler avoided the question and instead drew attention to altcoins, saying, “Where are you on what’s called altcoins, there’s 15 or 20 thousand of them.” Whereas Gensler maintained that bitcoin is not a security, he reiterated that most other tokens fit the legitimate definition of securities and therefore fall under the SEC’s jurisdiction. His firm position persists in spite of ongoing claims against the SEC and criticism from industry players and amid congressional hearings like “Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Asset.”

Gensler moreover declined to comment on Donald Trump’s proposal for a national bitcoin reserve, expressing, “I have a view but given my role and also we are in election season so for the listening public I will adhere to my chalk lines, which are securities markets.” He emphasized that his role is to focus on securities regulation, leaving broader economic issues to authorities like Federal Reserve Chair Jerome Powell.

Responding to claims that the SEC is regulating the crypto industry through litigation, Gensler contended that current laws already give the SEC with the authority to direct the space. He distinctly said, “Not liking the rules is not the same as that there aren’t rules.” Gensler defended the SEC’s activities, attesting that administrative clarity exists and that the office is basically implementing existing laws.

Gensler further communicated concern around the challenges confronting the cryptocurrency industry, especially the need to build trust. He highlighted the prevalence of fraud and financial scandals, saying, “Look at the leading lights in this field, in the crypto field just two years back. A number of them are in jail right presently, and I’m not just talking about SBF… there’s been tens of billions of dollars of losses and liquidations and so forth.” He underscored the significance of investor protection, addressing, “What innovative field in America survives without having building trust in that field and protecting investors or consumers?”

Gensler recognized that he does not know where bitcoin will be in 20 years but emphasized the significance of building trust in the industry. He remained firm that the SEC’s role is clear: to implement the existing lawful system, regardless of feedback. As he put it, “The field is going to have a challenge building trust… when there’s so numerous fraudsters, scammers.” Gensler’s comments highlight the progressing pressure between regulatory requirement and the push for development in the crypto space.