SEC Chairman Gensler Doubts Cryptocurrencies as Payment Methods, Emphasizes Existing Regulatory Framework
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On October 10, 2024, SEC Chairman Gary Gensler cast doubt on the future of cryptocurrencies as payment methods. He believes they are more likely to be viewed as stores of value. At a recent event at NYU School of Law, Gensler reaffirmed the adequacy of the Howey Test for cryptocurrency regulation, dismissing the need for new laws.
During a discussion with former SEC Commissioner Robert Jackson Jr., Gensler expressed that cryptocurrencies, including Bitcoin (BTC/USD), may not become widely accepted for payments. He noted that the investing public will ultimately determine the usefulness of any cryptocurrency through proper disclosures.
Gensler defended the SEC's tough enforcement actions against crypto companies. He pointed out that the industry has many fraudsters and scams. He remarked that many leading figures in the crypto space in 2024 are either in jail or awaiting extradition.
When asked about creating a new regulatory framework for digital assets, Gensler reiterated that the existing framework is sufficient. He stated that just because some people dislike the law doesn’t mean it isn’t effective.
As cryptocurrencies gain popularity, the role of regulatory bodies like the SEC becomes increasingly important. Gensler’s skepticism about cryptocurrencies as mainstream payment systems reflects ongoing debates about the future of digital currencies.
The SEC’s reliance on the Howey Test to define investment contracts in the crypto sector shows confidence in current regulations. A recent FBI report on cryptocurrency fraud revealed 69,468 complaints related to cryptocurrencies in 2023, primarily concerning investment fraud. The total losses reached $5.6 billion, a 45% increase from 2022.
The impact of Bitcoin as an institutional asset will be a key topic at Benzinga’s upcoming event, “The Future of Digital Assets,” scheduled for November 19.
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