This year is a great time to be a part of the cryptocurrency community. We have the spot Bitcoin exchange traded funds (ETFs) that are gearing up to shake the very foundations of Wall Street and the halving in the BTC ecosystem a few months from now. However, US Securities and Exchange Commission (SEC) Chairman Gary Gensler appears to be raining down on the Bitcoin bandwagon’s parade as he posted several warnings about crypto assets in a series of tweets on the X platform (formerly Twitter).
Warnings of SEC Chair Gary Gensler
The three-part rant of Gensler started off by emphasizing that not all crypto asset investments may be compliant with regulations, especially the provisions of federal securities laws. He cautioned investors about firms that may be withholding key information pertaining to the protections of their investments.
The SEC Chair also pointed out the volatility inherent to cryptocurrencies. He reminded everyone that many crypto projects have been bankrupted due to this factor.
In the last part, Gensler pointed out how these digital assets have been a breeding ground for scams. These include fraudulent coin offerings, Ponzi and pyramid schemes, and theft.
The Reactions
The seemingly noble cause of Gensler, however, was met with resistance from a majority of the responses. One user sarcastically thanked him for protecting us against fraudsters like FTX’s Sam Bankman-Fried and Celsius’ Alex Mashinsky. Another criticized the government watchdog for not even knowing how to do a thread.
Our favorite though was the comment telling everyone that unlike banks and the entire Western financial system, the cryptocurrency sector has never been a subject of a central bank bailout. The industry has also survived countless crises despite the central bank and traditional banks conspiring against it.
Spot Bitcoin ETF Approval Looms
The recent remarks of Gary Gensler amid the anticipated spot Bitcoin ETF verdicts no longer come as a surprise because he has always been opposed to cryptocurrencies. Over the years, he issued the same warnings against them whenever he had the had the chance, telling people about how they have been a hotbed for scams and their volatile nature.
The SEC Chair has a more mellow stance on Bitcoin though. During a congressional hearing in October 2023, he reaffirmed the status of BTC in relation to the Howey test.
“I would say it’s not a security and then the test is otherwise for other laws,” he told the members of the legislature when asked about his view on Bitcoin.
It should be noted as well that he never specifically mentioned Bitcoin in his recent posts, so they could very well be directed to other cryptos.