Gary Gensler first a partner at an investment bank Goldman Sachs, then an Obama administration financial regulator, and the finance chief for Hillary Clinton’s 2016 presidential campaign, says that cryptocurrencies such as Ether and Ripple appear as unregistered securities, and in current violation of the law. On the other hand, spokespeople for both coins insist they’re not securities at all.
In an interview with The New York Times, Gensler said, “There is a strong case for both of them — but particularly Ripple — that they are noncompliant securities.” However, he believes Bitcoin — and some others cryptocurrencies, like Litecoin and Monero — can remain exempt from securities regulations due to the way it is decentralized, but this is not so clear in the case of Ether and Ripple.
“2018 is going to be a very interesting time,” Mr. Gensler said. “Over 1,000 previously issued initial coin offerings (ICOs), and over 100 exchanges that offer ICOs, are going to need to sort out how to come into compliance with US securities law.” The recent crackdowns of The U.S. Securities and Exchange Commission on non-compliant ICOs show that this process has already begun.
While most blockchain experiments are in an early stage, Gensler said he had become convinced that blockchains could replace many of the middlemen in the financial industry. Due to his experience, his words carry a lot of weight in the broader financial community, and he does believe in crypto, having said that, “I would be surprised if 10 years from now [cryptocurrency] isn’t somewhere in the financial system in a meaningful way.”
Gensler, has recently begun working at the Massachusetts Institute of Technology, to write and teach about the potential he sees in blockchain.
100 total views, 1 views today