Erik Weijers, 9 months ago

Gensler: Bitcoin is a commodity

Gary Gensler, head of the US financial watchdog SEC, has stated that Bitcoin is a commodity. In doing so, he reaffirmed the position that it is not a security and therefore should not expect strict regulation.

Gensler made the statement during an interview on American television. Immediately there was speculation in the crypto world. Does this mean good news for the approval of a spot Bitcoin ETF? There have been rumors for some time that its approval is imminent, which would be good for Bitcoin's reputation among traditional investors. But Gensler's recent comment is not in itself new information and thus need not mean anything for such an ETF.

However, the statement does show that at this point it is no longer necessary to fear that U.S. regulators want to make life difficult for Bitcoin. Gensler is already the second chairman of the SEC to call Bitcoin a commodity. And trading regulations for commodities are less stringent than trading in securities.

Regulation and lawsuits

Gensler's refusal in the interview to call Ethereum a commodity - even though it has been given that status before - was also fodder for speculation. Could it be conceivable that Ethereum might lose that status after all? Probably not, but many other altcoins still face this fate of strict regulation and lawsuits if they are considered securities. This does not mean the end of such a project, but creates a lot of headaches and limits freedom and tradability.

The difference between a security and a commodity

You can't just issue a security without falling under strict regulations of securities trading. An ICO, where the founders of a project hand themselves an amount of coins and sell the rest in batches to private investors, is basically an unregistered security. This is not allowed without meeting strict reporting requirements. Bitcoin was never and will never be distributed in that way. Indeed, the mining of Bitcoin is accessible to all and very similar to how a commodity sees the light of day - it is a reasonable position not to consider Bitcoin a security.

Will there be a crackdown on altcoins labeled as securities in the future? In the long run, that shouldn't be a problem. Once they are covered by securities laws, the threshold for institutional customers to invest in them will be lower. But it sure will be a hurdle to pass.

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