The Block: Coinbase's CEO joins grumbling over SEC Chair Gensler's old crypto comments

Note to Gary Gensler: The internet is forever.

Another old video of Gensler lecturing on cryptocurrency at the Massachusetts Institute of Technology gained traction online this week. In the 42-second clip of what is a more than hour long lecture, Gensler appears to say that a wide swath of the crypto market are commodities, not securities.

“We already know in the U.S., and in many other jurisdictions, that three-quarters of the market are not ICOs, or not what would be called securities,” Gensler said during a lecture on crypto exchanges . “Three-quarters of the market is non-securities. It’s just a commodity, a cash crypto.”

Years later, the SEC has named a number of crypto tokens as securities in lawsuits under Gensler’s leadership. Coinbase CEO Brian Armstrong, whose company is gearing up to battle the Securities and Exchange Commission in court, reposted the 2018 Gensler clip with a one-word addendum.

“Wow,” Armstrong wrote in a tweet .

Note to Genlser's detractors: The internet is forever. But go back a bit further in the lecture from the start of the tweeted clip and it's clear that Gensler is referring to bitcoin and ether specifically when he says that three-quarters of the market are not securities.

Coinbase was recently warned of an investigation by the SEC, and Armstrong’s poke at Gensler comes days after his company filed a lawsuit against the SEC.

The commission did not respond to a request for comment.

Coinbase is suing the commission to answer its request that the SEC draft and approve a rule specific to digital assets. The company filed the initial petition for a rulemaking last year.

“It seems like the SEC has already made up its mind to deny our petition. But they haven’t told the public yet,” said Paul Grewal, Coinbase’s chief legal officer, in a Monday blog post. A former Coinbase employee was wrapped up in a separate insider trading case last year.

Coinbase did not comment.

Other Gensler videos Crypto watchers have been dredging up old videos of Gensler talking crypto, especially as his agency takes a more aggressive approach to the industry. Gensler became SEC chair in 2021, and previously led the Commodity Futures Trading Commission from 2009 to 2014. Before joining the SEC, Gensler was a professor at MIT's Sloan School of Management, where he taught on global economics and management.

After the SEC called Algorand’s token a security in a lawsuit against Bittrex this month, a video circulated online in which he calls the blockchain “great technology.” The 2019 video was filmed during a lecture Gensler gave at MIT.

(Updates with additional details on Gensler's lecture to show that the tweeted clip presented an incomplete picture of Gensler's comments.)

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