SEC’s Gensler seen telling hedge funds that Ethereum and Litecoin are ‘not securities’ in 2018 video

The video, taken from a crypto-themed institutional investor event hosted by Bloomberg and Fidelity in 2018, shows Gensler expressing sentiments that seem to contradict his recent suggestions that all cryptocurrencies other than bitcoin are securities. You can see related excerpts above.

More than 70% of the cryptocurrency market is Bitcoin, Ether, Litecoin and Bitcoin Cash. Why are these four named? “They are not securities,” Gensler tells the audience. “Three quarters of this (digital asset) market is not a security.”

The remarks came at a time when cryptocurrencies are in the midst of a bull market, and predate Gensler’s appointment as chairman of the Securities and Exchange Commission by just over two years. For the Bloomberg event, Gensler is slated as a senior lecturer at MIT and former chair of the Commodity Futures Trading Commission.

Other videos have surfaced from Gensler’s time at MIT that show him that Ethereum is not a security. This video is arguably even more important as it shows the current chair of the Securities and Exchange Commission providing guidance to hedge funds and other investors on the legal status of the cryptocurrency market.

He previously worked as crypto attorney Preston Byrne male That Gensler’s 2018 comments were made in his personal capacity rather than as a government official, and is therefore not material when it comes to the SEC’s current legal position. However, the comments are likely to infuriate the cryptocurrency industry and many cryptocurrency holders, who allege that Gensler failed to provide guidance on the legality of certain tokens before embarking on what many have called “regulation by execution strategy.”

The latest phase of Gensler’s campaign came last week when the SEC sued the largest cryptocurrency exchanges Binance and Coinbase for violating securities laws. In its legal complaints, the agency first identified 13 cryptocurrencies — including majors such as Solana, Cardano, and Polygon — as securities for the first time.

While Gensler recently declined to say that Ethereum is not a security, the Securities and Exchange Commission (SEC) has so far been silent about currencies other than bitcoin mentioned in Bloomberg’s letter. One of them, Litecoin, is an early competitor to Bitcoin that was launched in 2011, while Bitcoin Cash was a so-called fork of the original cryptocurrency that was a quick success when it was launched in 2017 but has since fallen in importance. .

Gensler’s comments about the four cryptocurrencies not being securities came as part of a much broader speech in which he described the dynamics of the cryptocurrency market and warned that several recently launched blockchain projects were outright scams. The now-SEC chair was introduced at the event as “My Friend Gary Gensler” by Mike Novogratz, the hedge fund billionaire who runs the Galaxy crypto fund.

The SEC did not immediately respond to a request for comment about any potential inconsistencies between Gensler’s 2018 statements and the agency’s current legal position.