SEC Chair labels bitcoin a ‘commodity’

Finally, Securities and Exchange Commission Chairman Gary Gensler has said, on Monday, that bitcoin is the only cryptocurrency he is willing to publicly consider as a commodity, rather than a security.

The debate over whether any particular cryptocurrency can be labeled a commodity rather than a security has far reaching implications because financial instruments that are securities can only be legally sold to the public if the issuer registers at the SEC and adheres to strict disclosure regime.

“Many of these tokens…the investing public is hoping for a return just like when they invest in other financial assets we call securities,” Gensler said adding that “many of these financial assets, crypto financial assets have the key attributes of a security,” and are therefore under the SEC’s jurisdiction.

“Some like bitcoin, and that’s the only one I’m gonna say…my predecessors and others have said, they’re a commodity,” he added, noting this classification gives the Commodity Futures Trading Commission a key role in overseeing bitcoin markets.

“There’s two great market regulators in this country,” Gensler continued, arguing that the agencies have the capacity to work together to bring fairness, transparency and investor protection to markets for digital assets.

Prices for digital assets like bitcoin and ether ETHUSD, -0.27% have fallen significantly in recent weeks, though have shown signs of stabilization more recently. Bitcoin has fallen nearly 60% over the past six months, but is up about 1% over the last week.