Gary Gensler Doubts Cryptocurrency Future, Says Leading Figures Are Either In Jail Or Awaiting Extradition

U.S Securities and Exchange Commission (SEC) Chairman Gary Gensler, at a recent event at New York University (NYU) School of Law, expressed his doubts over the potential of cryptocurrencies, including Bitcoin BTC/USD, to become widely accepted forms of payment.

What Happened: In a fireside chat with former SEC Democratic Commissioner Robert Jackson Jr., Gensler indicated cryptocurrencies are likely to continue being seen primarily as a store of value rather than a widely accepted medium of exchange, as reported by CoinDesk.

He stated the ultimate utility of any given cryptocurrency would be determined by the investing public through disclosures.

Gensler also defended the SEC’s aggressive enforcement actions against crypto companies, stating that the crypto industry was rife with “a lot of fraudsters, a lot of grifters, a lot of scams.”

He added that the leading figures in the crypto field in 2024 are either in jail or awaiting extradition.

Gensler sees no need for additional regulatory framework beyond the Howey Test, a time-tested criterion for determining what constitutes an investment contract.

When asked if it would be better to create a regulatory framework for digital assets, Gensler stated that framework exists already but if people do not like the law, it does not mean there is no law.

Also Read: Mark Cuban Slams Gary Gensler For Making Crypto Regulations ‘So Difficult:’ ‘If He Had Followed The Same Rules That Japan Did, FTX Would Still Be In Business’

Why It Matters: As cryptocurrencies continue to gain popularity and acceptance, the stance of regulatory bodies like the SEC becomes increasingly important. Gensler’s skepticism towards cryptocurrencies as a mainstream form of payment highlights the ongoing debate about the role and future of digital currencies.

The SEC’s reliance on the Howey Test for determining what constitutes an investment contract in the crypto space also indicates that existing regulatory frameworks are deemed sufficient.

A latest FBI cryptocurrency fraud report for 2023 reported 69,468 complaints were received with cryptocurrency nexus and the most reported was an investment fraud. With a total loss of $5.6 billion in 2023, there was an increase of 45% in losses since 2022.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

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