As a reminder, the Commission is now waging a concerted campaign against digital assets. Previously, the regulator banned staking for US customers on Kraken, stopped the issuance of BUSD stabelcoin and even threatened a lawsuit against Coinbase, the largest US exchange.

Meanwhile, Gensler himself has already managed to equate almost all altcoins with unregistered securities, even though he has no such right. The thing is that only court can make such verdict, but Gary in this case goes beyond his authority and uses his own position to influence the market.


It is important to note that the subject of Gensler’s speech at MIT’s business school had been raised the day before during a hearing before the House Financial Services Committee. One of the panelists asked if Gary had ever used and owned cryptocurrencies.

Gensler replied in the negative, which prompted serious questions. In this case, the congressman asked how Gary wanted to try to regulate the digital asset industry if he had never interacted with it directly. The same was true of his lectures: still, it is quite amusing when someone who is not directly involved in blockchain talks about it.

The details of the hearing are dealt with in a separate piece. We recommend reading it to get a better sense of what is going on with cryptocurrency regulation in the US and Gensler’s level at the same time.

What are the benefits of cryptocurrencies

An excerpt from the video is already being actively reposted by cryptocurrency enthusiasts on Twitter. A user of the social platform under the nickname zk_shark posted an important quote from Gensler’s lecture that makes one think about the current stance of the regulator’s leadership. Here’s that quote.

So, we already know in the US and in many other jurisdictions that three quarters of the cryptocurrency market is not an ICO or what can be called securities. In the US, Canada and Taiwan, three jurisdictions that follow something similar to the Howey test, three-quarters of the crypto market is not securities. They are simply commodities, money in the form of crypto.


As a reminder, the Howey test is a list of criteria that determines whether an asset qualifies as a security.

That is, in 2018, Gary Gensler clearly understood that cryptocurrencies could not be classified as securities, and argued this in some detail. However, Gensler's position as chairman of the SEC is now completely reversed. Well, he himself is calling coins securities and launching lawsuits against adequately regulated companies like Coinbase or Kraken without creating a new regulatory framework.


Here is a video of the relevant speech. Watching it will make clear the contradictions in Gensler’s previous and current position.

Of course, Gensler’s thoughts from 2018 are completely at odds with his statements from the day before. Both in the Commission’s enforcement actions and in Gary’s own words a clear message now follows – almost all cryptocurrencies can allegedly be equated with securities. It follows that a lot of cryptocurrency companies should be sanctioned because they are illegally distributing these securities.

According to Cointelegraph’s sources, prominent figures from the cryptocurrency world have joined the SEC head’s criticism. For example, ShapeShift platform founder Eric Voorhees has hinted that Gensler could very well be arrested for cheating.

But there have also been those who have begun to exonerate the SEC chairman. In this case, lawyer Preston Byrne explained what was wrong with the majority opinion.

I see many people are chiding Gary Gensler for this lecture video. But it is important to note that he speaks in different capacities. As a professor he can talk about abstract things. As a law enforcer he is obliged to enforce the laws as they are written.

That is, previously, Gensler could simply convey to his students the essence of the crypto market as it is and share his opinions. However, in his role as regulator, he is obliged to comply with securities control laws. According to Byrne, the system of laws itself regarding cryptocurrencies in the US is flawed and in need of urgent reform.

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Meanwhile, the US Securities and Exchange Commission continues to put pressure on the crypto market – and it’s the regulator’s actions that are one of the reasons for the prolonged fall in the capitalisation of the USD Coin Stablecoin (USDC). This was stated by Circle CEO Jeremy Allaire, who is issuing the coin.

Recall that USDC lost its peg to the dollar in March 2023, which was a direct result of the banking crisis in the United States. The USDC’s $3.3 billion in reserves were stuck in Silicon Valley Bank, which was one of the three banks closed by the regulators at the time. Circle assured its customers that it had investor backing to fill the gap, but the market reacted quickly to the news and the USDC price fell as low as 86 cents for a while.

At its peak, USDC had a capitalisation of $56 billion and the coin itself was the third highest ranked cryptocurrency after USDT. However, by today that figure has almost halved and is currently at $30.7 billion.


We believe that Gensler's professorship in 2018 does not justify his current actions as SEC chairman. This video shows that Gary is aware of the benefits of decentralisation and digital assets, and sees them as a common commodity instead of securities. Accordingly, the official deserves criticism - and especially given his oddly hostile approach to crypto today.


Look for even more interesting stuff in our cryptochat ex-rich. There trying to wait for the new bullrun to come soon, which will be even bigger.