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Gensler Says SEC Can't and Won't Ban Cryptocurrency

The U.S.'s approach to crypto regulation "is really quite different" from that of China.

Gensler Says SEC Can't and Won't Ban Cryptocurrency
Shutterstock photo by Andriy Blokhin

Key Takeaways

  • SEC Chairman Gary Gensler was questioned about the possibility of introducing a China-like cryptocurrency ban today.
  • Gensler answered that this does not fall under the SEC's duties, and that the U.S.'s approach is different from that of China.
  • Representative Ted Budd initially put forward the question during a video conference that took place today.

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Gary Gensler, Chairman of the U.S. SEC, has stated that the regulator has no plans to ban cryptocurrency in the United States.

SEC Won’t Ban Crypto

Gensler stated that the U.S. Securities and Exchange Commission has no plans to ban cryptocurrency during a video conference with members of Congress that took place today.

His statements were made in response to Representative Member Ted Budd, who observed that China has been on a “war path” against cryptocurrency since 2013. Budd drew attention to the country’s ban on crypto transactions last month.

Specifically, Gensler stated the U.S.’s “approach is really quite different” from that of China. “It’s a matter of how we get [the cryptocurrency] field within the investor-consumer protection that we have,” Gensler said regarding the SEC’s own duties. He also noted that other departments are confronting issues around anti-money laundering, tax compliance, and financial stability issues.

On further questioning, he added that restricting cryptocurrency to make way for a government-backed digital currency “would be up to Congress.” He explained that the SEC is only able to work with the authority that it has been given.

The U.S. SEC has historically regulated cryptocurrencies that can be classified as securities, a category that includes most new tokens that are sold by companies as part of an ICO or other offering. The SEC views these assets as posing a risk to investors.

As such, the SEC has little interest in regulating long-established cryptocurrencies with no initial sale such as Bitcoin.

China’s Crypto Ban Sparks Discussions

China’s recent decision to impose a ban on cryptocurrency transactions and mining has lead to plenty of discussion about whether a similar policy could be implemented in the U.S.

On Sept. 30, U.S Federal Reserve Chairman Jerome Powell directly addressed the issue, stating that he has “no intention” of banning crypto, though stablecoins may be brought under regulations.

Cryptocurrency bans should be understood in light of the fact that most governments are only capable of banning businesses from working with cryptocurrency. Bitcoin’s distributed network allows peer-to-peer transactions regardless of government policy.

Disclaimer: At the time of writing this author held less than $75 of Bitcoin, Ethereum, and altcoins.

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