A four-year-old video of United States Securities and Exchange Commission (SEC) Chair Gary Gensler praising the smart contract platform Algorand has emerged on Twitter. The video’s circulation comes after the SEC declared that ALGO, Algorand’s native token, is an unre...
A four-year-old video of United States Securities and Exchange Commission (SEC) Chair Gary Gensler praising the smart contract platform Algorand has emerged on Twitter.
The video’s circulation comes after the SEC declared that ALGO, Algorand’s native token, is an unregistered security.
In the video, Gensler referred to Algorand as a “great technology” and discussed the potential of a high-performance smart contract network integrating Uber or Lyft-like applications on its platform.
The Algorand Foundation’s ALGO is one of six tokens identified as an unregistered security in the SEC’s lawsuit against the crypto trading platform Bittrex, filed on April 17.
The lawsuit scrutinized the Algorand Foundation’s initial coin offering (ICO) of ALGO in June 2019. Cryptocurrency researcher Mason Versluis was among the first to draw attention to the video, criticizing Gensler for “shilling” ALGO and accusing him of hypocrisy.
Gensler’s Algorand comments were made during a Massachusetts Institute of Technology (MIT) “Fintech Beyond Crisis” conference held on April 25, 2019.
Before becoming the SEC’s chair, Gensler worked as a professor of global economics and management at MIT. In the speech, Gensler acknowledged former MIT colleague and Algorand founder Silvio Micali, who appeared to be in the audience.
Questions raised over Gensler’s advice to crypto firms
The video has prompted Cinneamhain Ventures partner Adam Cochran to question Gensler’s long-standing advice for crypto firms to register with the SEC. Cochran tweeted on April 17:
Surely if there is a path to register, a world renown MIT professor who personally knows the Chairman of the SEC can figure it out.
Fox Business reporter Eleanor Terrett anticipates that Gensler’s Algorand comments will be addressed in his upcoming testimony before the U.S. House Committee on Financial Services on April 18.
Critics have also mocked the situation, highlighting the price decline of ALGO, which has experienced a 93.8% decline since its launch, according to CoinGecko data.
SEC Reopens Public Comment on Exchange Definition Expansion
On April 14, the SEC held a meeting to reopen public comment on its proposal to expand the definition of an “exchange.” The move clarifies that existing rules on exchanges also apply to decentralized cryptocurrency platforms.
Crypto firms have criticized the plan as vague and aimed at bringing decentralized finance (DeFi) platforms under the regulator’s oversight.
The plan, first proposed in January 2022, would expand the exchange definition to include platforms using “communication protocols” like request-for-quote systems.
If adopted, the change is expected to capture many more venues for regulation beyond traditional exchanges that facilitate orders from multiple buyers and sellers in a marketplace.
Although the proposal was initially intended for Treasury markets and other government securities marketplaces, crypto firms have pushed back against the plan amid growing tensions with the regulator. Many in the industry argue that existing securities regulations are inappropriate and that the sector requires new rules.