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SEC Chair Gensler Affirms Bitcoin Is a Commodity — ‘That’s the Only One I’m Going to Say’

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SEC Chair Gensler Affirms Bitcoin Is a Commodity — ‘That’s the Only One I’m Going to Say’

SEC Chair Gensler Confirms Bitcoin Is a Commodity — 'That's the Only One I'm Going to Say'

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, says bitcoin is a commodity. He emphasized that the SEC, the Commodity Futures Trading Commission (CFTC), and banking regulators will collaborate to oversee the crypto sector.


Gary Gensler: Bitcoin Is a Commodity

SEC Chairman Gary Gensler clarified his position on cryptocurrency, particularly bitcoin, in an interview with Mad Money host Jim Cramer on CNBC Monday.

“This is a highly speculative asset class. We’ve known this for a long time,” Gensler said when asked about cryptocurrency. Citing the “ups and downs of this speculative asset class,” he explained that when people invest in “bitcoin and hundreds of other crypto tokens,” they hope for a return, “just like when they invest in other financial assets” that are securities.

Chair Gensler stressed that many of these “crypto financial assets” have “the key attributes of a security.” He added: “Some of them … are under the Securities and Exchange Commission.” In contrast, citing what his “predecessors and others have said,” he described:

Some, like bitcoin, and that’s the only one I’m going to say … are commodities.

The SEC chief noted that besides BTC, he is not going to discuss other crypto tokens specifically.

Gensler’s statement agrees with the chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, who said last month that bitcoin (BTC) is a commodity. However, Behnam further said ether (ETH) is also a commodity.

Bitcoin proponents welcome Gensler’s clarification. Digital assets manager Eric Weiss tweeted: “Gensler is the 2nd consecutive SEC Chair to declare that bitcoin is a commodity, making it all but impossible for this classification to be altered in the future. Very significant indeed.”

The pro-bitcoin CEO of Microstrategy, Michael Saylor, opined: “Bitcoin is a commodity, which is essential for any treasury reserve asset. This allows politicians, agencies, governments, and institutions to support bitcoin as a technology and digital asset to grow the economy and extend property rights and freedom to all.” The Nasdaq-listed software company has amassed 129,218 bitcoins for its corporate treasury.

SEC, CFTC, Banking Regulators Collaborating on Crypto

Gensler proceeded to comment on the SEC collaborating with other federal regulators to oversee the crypto sector, including the CFTC and banking regulators. He emphasized that many crypto tokens are currently trying to operate in a non-compliant way.

The SEC chief then mentioned stablecoins, noting:

There’s work to be done there around stablecoins … There’s a lot of work to be done to really protect the investing public.

Last week, Gensler proposed “one rule book” for the regulation of the crypto sector.

During the interview Monday, Cramer brought up Fidelity Investments allowing bitcoin as an option for 401(k) plans — the decision that has troubled the Labor Department. The Mad Money host asserted that it makes people “feel very comfortable with the asset that is bitcoin.” He asked Gensler, “are we too comfortable” with bitcoin?

“There’s a lot of risk in crypto” and “there’s also a lot of risk in classic securities markets,” Gensler replied, elaborating:

In the U.S… we have market regulators like the CFTC and the SEC to help protect the public against fraud and manipulation in the markets.

Gensler added that there are currently thousands of crypto tokens that do not comply with the laws, noting that when a group of entrepreneurs is selling something to the public, there must be “full and fair disclosures.” The chairman stressed: “That’s what the SEC does. That’s what we do really well.”

What do you think about the comments by SEC Chair Gensler? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Grayscale Launches New Investment Product While Bitcoin Trust Crashes to 35%

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Grayscale Launches New Investment Product While Bitcoin Trust Crashes to 35%

Grayscale Investments is offering investors an opportunity to invest in Bitcoin mining hardware in the bear market.

The new investment opportunity, called the Grayscale Digital Infrastructure Opportunities LLC (GDIO), is now open to qualified individual and institutional investors, even as the asset manager allows ETF-related court proceedings to run their course.

Grayscale putting capital to work

Grayscale will use investor capital from the GDIO to buy mining hardware for a minimum of three years. It will use the hardware to mine and subsequently sell bitcoin. Mining is the energy-intensive process undertaken by a computer network to create a new transaction block and verify it. The node in the network that creates the block is known as a miner. A miner is rewarded in bitcoin for his effort, which typically requires large amounts of cheap electricity and computing power.

Part of the proceeds Grayscale will earn from its efforts will be paid out quarterly to GDIO investors.

“Grayscale’s unique position at the center of the crypto ecosystem enables us to create offerings that allow investors to put capital to work through differing market cycles,” stated Michael Sonnenshein, Grayscale’s chief executive.

GDIO represents another way the company has sought to provide investors with exposure to bitcoin without directly holding the asset.

Investors can also purchase shares from its GBTC trust and gain exposure to bitcoin through Grayscale’s legally regulated business in the U.S.

But Grayscale has a problem. Because investors cannot redeem shares in the trust for bitcoin, the price per share has dropped drastically, trading at a discount of 35% to its Net Asset Value. 

At the close of the trading day on Oct. 5, shares were trading at a shade over $12, despite being backed by $18.45 worth of bitcoin.

To mitigate this discount, Grayscale has pursued the conversion of GBTC into a spot bitcoin exchange-traded fund, which has so far been unsuccessful. The U.S. Securities and Exchange Commission denied the company’s latest application in June 2022, prompting Grayscale to pursue legal action against the federal agency. 

Nic Carter of Castle Island Ventures, a venture capital firm focused on early-stage public blockchain startups, said that Grayscale could wind down the ETF:

watching the GBTC discount. looks like ATL at -35%. on top of discounted spot BTC. paths to breaking open the piggy bank: SEC can approve ETF conversion, or Grayscale can wind down the trust themselves if they so choose.

— nic carter (@nic__carter) June 17, 2022

The SEC maintains that spot bitcoin ETFs are prone to underlying market manipulation.

Grayscale undeterred by SEC rejection

Despite consistent resistance from U.S. regulators, Grayscale launched its first European ETF in May 2022, which tracks the Bloomberg Grayscale Future of Finance Index, offering customers exposure to institutions at the crossroads of finance, technology, and cryptocurrencies.

Grayscale raised investors’ eyebrows recently when it announced that it had applied with the SEC to distribute 3 million ETHPoW tokens that were distributed to all Ethereum (ETH) holders after the controversial proof-of-work fork went live. 

At the time, Grayscale said it was seeking the rights to sell the tokens and pay out shareholders. 

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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