SEC Chief Gary Gensler Claims BTC ‘Not That Decentralised’ Says It’s a Mere Accounting Ledger

By Aaron Feuerstein February 15, 2024 In Bitcoin, Cryptocurrency, ETF, SEC
  • Gary Gensler repeated the SEC emphasis on merit neutrality towards these Bitcoin and related ETFs.
  • He also expressed scepticism about Bitcoin’s decentralisation, noting the significant market volume controlled by a few crypto exchanges.
  • Gensler remains cautious about the industry and described Bitcoin merely as an “accounting ledger.”
  • He had a final pun for one of the co-hosts when he questioned his merit neutrality.

Gary Gensler, the Chair of the US Securities and Exchange Commission (SEC), is well-known to any investor and most with an interest in crypto will have heard about him. The former MIT lecturer who spoke eloquently about the blockchain industry in the past, has a way of giving interviews without saying much.

Recently he spoke to Andrew Ross Sorkin, Becky Quick and Joe Kernen on the CNBC Squawk Box about Crypto and AI. Aside from the obligatory Gensler phrase “I can’t comment to any specifics” he also offered some interesting insights.

Mind Your Language – It’s Technically Called ETP

Sorkin, who wanted to get the opinion of the chair on the first month of Spot Bitcoin ETFs (exchange traded funds) trading, promptly got corrected by Gensler.

ETFs you call them, they’re technically exchange-traded products.

Gary Gensler

Gensler called the ETFs exchange traded products, ETPs, despite the companies offering them clearly labelling them as ETFs.

Source: BlackRock

The chair stated that there was nothing new about these funds and that it was not the first way to buy Bitcoin, nor was it an approval of the underlying asset—once again reaffirming the SEC’s merit neutrality.

Co-host Says SEC Approval Done Grudgingly

Co-host Joe Kernen weighed in and said the approval by the regulator was a reluctant act and the SEC was less than neutral. Kernen said it was astonishing that as someone who taught Bitcoin and blockchain and as someone people listen to, Gensler could overlook Bitcoin’s merits and almost see it as something “pet rock-ish.”

Which Gensler, evasive as usual, countered with the SEC’s responsibility towards investors.

I get your words about pet rocks and so forth. But I think we also have an investor education responsibility at the SEC, particularly about those investments that are non-compliant with either the securities laws or commodities laws and so forth.

Gary Gensler

The chair reiterated that many crypto assets are in his view securities and the exchanges where they are traded lack investor protection, unlike for example the NASDAQ.

Source: CNBC

“It’s Not That Decentralised”

The conversation stirred towards whether Bitcoin is truly decentralised, which Gensler doesn’t believe to be the case. He cited the fact that a core of three to six crypto exchanges are responsible for most of the market volume made it much less centralised than most expect.

Gensler also pointed to the fact that ultimately Bitcoin is nothing more than an accounting ledger, a clever ledger as he called it but nothing other than that, questioning why anyone would want to put their money in that.

How many times do you have people on this show that say I want to invest in something because how the books and records are kept. I mean, Joe, really, it’s just an accounting ledger.

Gary Gensler

The answer to that question why anyone would invest in it? Gensler says, it’s speculative investing.

Nothing New On Spot Ethereum ETFs

Regarding the Ethereum Spot ETF question, the SEC chief did not deviate from previous statements, saying he would not prejudge this and that any decision is up to the full five-member commission.

In the closing remarks Gensler also had a warning for companies using AI and trying to blame any mishaps on the program, saying that it’s mere technology and not more than a tool.

Kernen argued that this perspective should extend to Bitcoin, viewing it merely as a tool and not liable for any associated fraud. Gensler, however, was not persuaded and had a snappy comeback prepared.

I think we’ve established that Joe is not merit neutral.

Gary Gensler

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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