SEC Chair Got Backlash from Crypto Lawyers Over Securities Classification

The Chairman of the United States Securities and Exchange Commission (SEC) Gary Gensler recently made a statement implying that all crypto tokens apart from Bitcoin (BTC) are classified as securities and crypto lawyers are not having it at all. 

In addition to Gensler’s claim, he also mentioned during a New York Magazine interview on crypto, that because of their securities status, these crypto assets including Ethereum (ETH) are under the jurisdiction of the regulator.

“Everything other than bitcoin, you can find a website, you can find a group of entrepreneurs, they might set up their legal entities in a tax haven offshore, they might have a foundation, they might lawyer it up to try to arbitrage and make it hard jurisdictionally or so forth,” the SEC Chair analysed, adding that “But at the core, these tokens are securities because there’s a group in the middle, and the public is anticipating profits based on that group.”

SEC Chair Opinion is Not a Final Decision

Markedly, Gensler began to make talks of ETH categorizing as securities right before The Merge (transition from PoS to PoW consensus mechanism). Policy lead at the crypto advocacy group the Blockchain Association Jake Chervinsky rebuffed Gensler’s claim of command over the digital asset industry, emphasizing that the latter’s opinion is not the law.

“Chair Gensler may have prejudged that every digital asset aside from bitcoin is a security, but his opinion is not the law. The SEC lacks authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time,” pending when this happens, Cheevinsky is maintaining his stance.

Another lawyer, Logan Bolinger also reiterated Chervinsky’s sentiment citing that “Gensler’s opinions on what is or isn’t a security are not legally dispositive.” Explicitly, he explained that such decisions are solely the responsibility of a judge and not the SEC Chair.

Noteworthy, crypto investors have constantly opposed Gensler’s position on cryptocurrencies and other related fields. Last year, a petition with over 18,000 signatures sponsored by ‘AI from Boston’ was published to oust the SEC Chair from office due to his involvement in the lawsuit against Citadel Securities.