'It's Not That Decentralized': SEC Chair Gary Gensler Hesitant On Bitcoin, Calls It 'Just An Accounting Ledger'

Securities and Exchange Commission (SEC) Chair Gary Gensler on Wednesday addressed the ongoing debate surrounding Bitcoin (CRYPTO: BTC) and other cryptocurrencies, expressing concerns about investor protection and highlighting the asset's association with illicit activities.

A 'Clever' Accounting Ledger

In an interview with CNBC, Gensler argued that financial systems tend towards centralization and questioned the decentralization of Bitcoin: "We have a handful of three to six core so-called crypto exchanges."

When asked about the decentralization of the Bitcoin network itself, Gensler said "it's not that decentralized" and called it "just an accounting ledger," albeit a "clever" one. 

Gensler also differentiated Bitcoin from the U.S. dollar, highlighting the latter's role as a medium of exchange with backing from a central bank.

'The Leading Market Share In Ransomware'

When asked about Bitcoin's use cases, Gensler raised a critical point: "It's the leading market share in ransomware. And that's publicly known," he said.

He pointed to the prevalence of fraud and manipulation within the crypto industry, citing numerous bankruptcies and investor losses.

Gensler communicated that Bitcoin lacks central bank support and regulations aimed at preventing crime, unlike fiat currencies, such as the U.S. dollar.

Read Also: Bitcoin Back Above $1 Trillion Market Cap: Crypto Experts Weigh In On What's Ahead

Decentralization Vs. Regulation

The discussion touched upon the tension between decentralization, a core principle of cryptocurrencies, and regulatory oversight.

Gensler emphasized the SEC's focus on ensuring compliance with securities laws and protecting investors, stating that many crypto tokens might qualify as securities and require regulation.

He stressed the importance of transparency and accountability, even in innovative systems like blockchain technology.

When compared to Jamie Dimon's "pet rock" assessment of Bitcoin, Gensler laughed off the comment and stressed his agency's "investor education responsibility."

The Future Of Ethereum

While declining to prejudge ongoing SEC evaluations, Gensler acknowledged the importance of Ethereum (CRYPTO: ETH) and indicated that a separate analysis would be conducted to determine its classification under securities laws.

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Photo: Created with an image from Third Way Think Tank on flickr