News anchor Joe Kernen defended Bitcoin in a spirited exchange with SEC Chairman Gary Gensler during an interview on CNBC’s “Squawk Box” on Feb. 14, after the regulator questioned the decentralized nature of the flagship crypto.
The conversation, which turned into a wide-ranging discussion about crypto, investor protection and the recent approval of spot Bitcoin ETFs, highlighted different views on the role of digital assets in the financial market.
“Not so decentralized”
Gensler’s comments cast a shadow over the oft-celebrated decentralized aspect of Bitcoin. He said:
“It’s not that decentralized, Joe.”
The SEC chairman argued that the fact that there are only a handful of exchanges where Bitcoin can be traded means that it is not as decentralized as people think. He has also previously called spot Bitcoin ETFs “ironic” due to their centralized nature.
Gensler further stated that only the “accounting ledger” underlying crypto was decentralized. These claims prompted a strong rebuttal from Kernen, who defended Bitcoin’s decentralized ledger as a fundamental feature that strengthens its integrity and appeal among investors.
Kernen added:
“It’s in a ledger that everyone has… that can’t be double-counted. It is almost immutable and that is why people think it has inherent value.”
Kernen further wondered why someone who had taught Bitcoin at MIT would take such a negative stance toward crypto.
“Merit Neutral”
During the interview, Gensler emphasized the SEC’s merit-neutral stance on cryptocurrencies, indicating that the approval of Bitcoin ETFs was not an endorsement of Bitcoin itself, but a move to ban trading in regulated exchange-traded products (ETPs). make possible.
He emphasized the importance of investor protection and compliance with securities laws, saying that companies, regardless of the nature of the investment, must provide complete, fair and truthful information to the public.
Kernen pushed back on Gensler’s cautious approach to Bitcoin, suggesting that the SEC’s position seemed less than neutral and hesitant. He emphasized that Bitcoin’s popularity and widespread adoption among investors was a testament to its legitimacy and value, and that it was not merely a speculative asset.
Illegal financial activities
The discussion also touched on concerns about fraud and manipulation within the crypto space, the speculative nature of crypto investments, and the role of centralization in the financial world.
Gensler noted the risks associated with investing in cryptocurrencies and emphasized the importance of regulatory frameworks to protect investors from fraud and manipulation.
However, Kernen was quick to point out that crypto makes up only a fraction of the percentage of illicit financial flows around the world compared to the US dollar.
Genlers said in response that Bitcoin was the “token of choice” for ransomware.