“Say Goodbye to Uncertainty: SEC Chair Gensler Affirms that Ethereum and Litecoin are not Securities in 2018 Video Address to Hedge Funds”

Future SEC Chairman Gary Gensler: Four Cryptocurrencies are Not Securities

In a newly-surfaced video from 2018, future Securities and Exchange Commission (SEC) Chairman Gary Gensler tells institutional investors that four cryptocurrencies are not securities, and that at the time, 75% of the crypto market fell outside that legal category. The video comes from an event hosted by Bloomberg and Fidelity for institutional investors in cryptocurrencies.

Gensler’s Contradicting Sentiments

Gensler’s 2018 comments appear to contradict his more recent statements that suggest all cryptocurrencies other than Bitcoin are securities. At the Bloomberg event, Gensler identifies as a senior MIT lecturer and former Chair of the Commodities Futures Trading Commission.

The four cryptocurrencies mentioned by Gensler are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. He states, “They’re not securities. Three quarters of this digital asset market are not securities.” At the time, the crypto market was experiencing a bull run, and Gensler’s appointment as SEC Chair was still two years away.

Gensler’s Significant Guidance

Gensler’s 2018 guidance is notable for potentially angering the cryptocurrency industry and owners, who claim that he failed to provide guidance about the legality of specific tokens before launching a “regulation by enforcement strategy.” Crypto lawyer Preston Byrne notes that Gensler’s comments came in a personal capacity and not as a government official, and are thus not material when considering the SEC’s current legal position.

Gensler’s Crackdown on Crypto Exchanges

Recently, the SEC sued major crypto exchanges Binance and Coinbase for violating securities laws, identifying 13 cryptocurrencies – including Solana, Cardano, and Polygon – as securities for the first time. While Gensler has refused to say whether Ethereum is a security, the SEC has not yet provided any information on the other non-Bitcoin currencies mentioned in Gensler’s 2018 speech.

Gensler’s Grander Speech

Gensler’s comments about the four cryptocurrencies came as part of a broader speech in which he discussed cryptocurrency market dynamics and warned investors about scams. Mike Novogratz, a hedge fund billionaire who runs the crypto fund Galaxy, introduced Gensler as “my friend Gary Gensler.”


While Gensler’s 2018 guidance does not reflect the SEC’s current legal position, it is significant in that it provides insight into the now-chair’s sentiments on the legality of certain cryptocurrencies. At the time of his speech, Gensler believed that four very prominent cryptocurrencies were not securities, and that most of the digital asset market was outside the legal category.

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