Crypto Lawyer Claps Back At SEC Chair Who Said All Cryptos Except Bitcoin Are Securities

A cryptocurrency lawyer is clapping back at the recent statement of the U.S. Securities and Exchange Commission (SEC) chairman, who suggested that all cryptocurrency, except Bitcoin, are securities and it falls under the financial regulator's jurisdiction.

SEC chairman Gensler, in a recent interview with the New York Mag, claimed that "everything other than Bitcoin," the world's largest crypto asset by market capitalization, is under the agency's scope, and other crypto projects "are securities because there's a group in the middle and the public is anticipating profits based on that group."

Gensler further said, "They might drop their tokens overseas at first and contend or pretend that it's going to take six months before they come back to the U.S. But at the core, these tokens are securities because there's a group in the middle and the public is anticipating profits based on that group."

The SEC chairman likened crypto investors who hoped to profit from the efforts of intermediaries to stockholders in publicly-listed companies waiting to take profit from their investments, noting that transactions like these should fall in securities classification, which is subject to SEC's regulation.

"There are people behind these cryptocurrencies using a variety of complex and legally opaque mechanisms, but at the most basic level, they are trying to promote their tokens and entice investors," Gensler further said in the interview.

But, the SEC chairman's statement was not well-received in the crypto community, especially among lawyers, who did not take his words sitting down.

Among them is popular crypto lawyer Jake Chervinsky who burned the regulator in his tweet and said that the SEC has no authority to regulate digital assets.

He also argued that "until and unless" the financial regulator "proves in court" its jurisdiction over crypto assets, it does not have any authority to regulate any of them.

"Chair Gensler may have prejudged that every digital asset aside from bitcoin is a security, but his opinion is not the law. The SEC lacks the authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time," the crypto lawyer's tweet read.

Another lawyer, Logan Bolinger weighed in on Gensler's statements and reminded the crypto community that it was just the chairman's opinion on what is and what is not a security.

"Friendly reminder that Gensler's opinions on what is or isn't security are not legally dispositive. In this country, judges - not SEC chairs - ultimately determine what the law means and how it applies. [That] doesn't mean his thoughts are irrelevant. They're just not dispositive," Bolinger tweeted.