SEC Chairman Gary Gensler faces criticism for praising Algorand in 2019 after recently declaring its token an unregistered security.
A video from four years ago has recently resurfaced on Twitter, spotlighting Gary Gensler, the United States Securities and Exchange Commission (SEC) Chairman, as he praises Algorand, the smart contract platform. This development comes on the heels of the SEC’s classification of ALGO, the native token of Algorand, as an unregistered security. Consequently, members of the crypto community have accused Gensler of endorsing Algorand and called attention to the perceived inconsistency in his stance.
In the video, Gensler, who was then a professor at the Massachusetts Institute of Technology (MIT), lauds Algorand as an exceptional technology. He also discusses the possibility of integrating an Uber or Lyft-like application into a high-performance smart contract network using Algorand. Gensler made these remarks during the MIT “Fintech Beyond Crisis” conference held on April 25, 2019. During his speech, Gensler acknowledged the presence of Silvio Micali, the founder of Algorand and Gensler’s former MIT colleague.
Bittrex Faces SEC Lawsuit and ALGO’s Controversial Security Classification
Recently, the SEC filed a lawsuit against the crypto trading platform Bittrex, claiming that six tokens, including ALGO, are unregistered securities. The lawsuit particularly focuses on the Algorand Foundation’s initial coin offering (ICO) of ALGO in June 2019. Gensler’s earlier praise of Algorand has now come under scrutiny, with cryptocurrency researcher Mason Versluis among the first to criticize the SEC chairman on Twitter for promoting ALGO.
It is worth noting that Gensler’s speech took place two months before ALGO entered the market in late June 2019. Since its launch, ALGO has seen a substantial price drop of 93.8%, as per CoinGecko data.
Adam Cochran, a partner at Cinneamhain Ventures, has questioned Gensler’s long-standing recommendation for crypto firms to register with the regulator. Critics argue that an MIT professor with personal connections to the SEC chairman should be capable of navigating the registration process if such a path exists.
Eleanor Terrett, a Fox Business reporter, expects Gensler to address questions about his Algorand comments during his upcoming testimony before the U.S. House Committee on Financial Services scheduled for April 18. Check this thread to read more about Gensler’s video.
Gensler’s SEC Leadership and Potential Implications
Gary Gensler became the SEC chair on April 17, 2021, after President Joe Biden’s nomination was approved by the Senate on April 14, 2021. In an April 17 tweet, Gensler expressed his pride in serving the SEC for the past two years and emphasized the 1,500 enforcement actions undertaken during his tenure.
The emergence of the video and the ensuing controversy surrounding Gensler’s praise of Algorand may have far-reaching consequences for the crypto community and the SEC’s approach to cryptocurrency regulation. As the debate continues, all eyes will be on the SEC and its chairman to see how the situation develops and whether it will impact future regulatory actions within the cryptocurrency space.