Biden SEC Pick Gary Gensler Vague Over Crypto Regulation

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  • Gary Gensler was vague when discussing cryptocurrency regulation yesterday
  • Joe Biden’s SEC chair pick sounded tougher on platforms like Robinhood
  • Gensler teaches on blockchain and cryptocurrency at MIT’s Sloan School

Joe Biden’s pick for Security and Exchange Commission Chair Gary Gensler was vague on the potential regulation of the cryptocurrency space in his appearance before the Senate Banking Committee. Of more interest to the committee was regulating trading platforms like Robinhood which gamify the trading experience, with Gensler saying that the regulation of cryptocurrencies could fall across multiple government departments.

Gensler’s Prior Comments Taken Out of Proportion

Gensler’s announcement as president Biden’s pick for SEC chief drew widespread appreciation from the cryptocurrency community as a professor at MIT’s Sloan School of Management, Gensler teaches on the subjects of digital currencies and blockchain technology. This led some, like Bank of Singapore chief economist Mansoor Mohi-uddin, to declare that the SEC may “alter its view” on a Bitcoin ETF, comments that were taken out of proportion by some in the media.

Trading Platforms Take Center Stage

During his committee hearing, Gensler fielded questions about Robinhood and cryptocurrencies, but seemed to take a tougher approach on the trading apps, which have stolen the headlines in recent weeks. There was talk of more investor protection so younger traders don’t get enticed onto them, something that filtered through to his discussion of Bitcoin and cryptocurrencies:

To the extent that somebody is offering an investment contract or security that’s under the SEC’s remit, and they have exchanges that operate there, then we have to make sure there’s investor protection.

Gensler added that, “If it’s not that, and it’s a commodity, as Bitcoin has been deemed to be, then it’s either a question for Congress … or it’s possibly a question for the Commodity Futures Trading Commission.”

This leaves those within the crypto space with little more insight into what Gensler is planning as far as crypto regulation goes, but it suggests that he won’t be draconian in his attitude towards the industry, which he could decimate with tougher restrictions.