The Securities and Exchange Commission (SEC) has been making moves to crack down on cryptocurrency exchanges, Coinbase and Binance, over the trading of unregistered securities.
What Happened: A 2018 video has surfaced recently featuring SEC Chairman Gary Gensler stating that Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), Litecoin (CRYPTO: LTC), and Bitcoin Cash were not securities.
"Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They're not securities. Three-quarters of this market is probably not securities," Gensler said in the viral video posted by Sam Lyman, former Senior Scriptwriter at the U.S. Chamber of Commerce.
Lyman tweeted the video stating: "If Gary looks slim, it's because he's been eating nothing but his own words since 2018."
If Gary looks slim, it's because he's been eating nothing but his own words since 2018. "Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They're not securities." "Three-quarters of this market is probably not securities." — Sam Lyman (@SamLyman33) June 12, 2023
Why It Matters: The SEC filed legal proceedings against both Binance and its CEO, Changpeng Zhao. The allegations include multiple violations of U.S. securities regulations, a move that the exchange called “an attempt to rush to claim jurisdictional ground from other regulators and was devoid of any concerns for investors.”
Interestingly, documents filed by Gibson Dunn and Latham & Watkins, two prominent law firms representing Binance, reveal that Gensler allegedly offered to serve as an advisor to the crypto exchange in conversations that took place with Binance executives, including Zhao, in March 2019. Moreover, Gensler even went on to meet Zhao for lunch in Japan that same month.
Gensler in February reiterated that Bitcoin is not a security but a commodity. He said that "everything else other than bitcoin is a security."