News anchor Joe Kernen defended Bitcoin in a spirited exchange with SEC Chair Gary Gensler during an interview on CNBC’s “Squawk Box” on Feb. 14 after the regulator questioned the flagship crypto’s decentralized nature.
The conversation, which veered into a wide-ranging discussion about crypto, investor protection, and the recent approval of spot Bitcoin ETFs, highlighted differing viewpoints on the digital asset’s role in the financial market.
“Not that decentralized”
Gensler’s remarks cast a shadow over the often-celebrated decentralized aspect of Bitcoin. He said:
“It’s not that decentralized, Joe.”
The SEC Chair argued that because 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” underpinning crypto was decentralized. These assertions sparked a strong rebuttal from Kernen, who championed Bitcoin’s decentralized ledger as a foundational feature that bolsters its integrity and appeal among investors.
Kernen added:
“It’s in a ledger that everyone has… that can’t be double-counted. It’s almost immutable, and that’s why people think it has an inherent value.”
Kernen further questioned why someone who had taught about 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 allow for its trading within regulated exchange-traded products (ETPs).
He highlighted the importance of investor protection and compliance with securities laws, stating that regardless of the investment’s nature, companies must provide full, fair, and truthful disclosures to the public.
Kernen pushed back on Gensler’s cautious approach to Bitcoin, suggesting that the SEC’s stance seemed less than neutral and more hesitant. He emphasized that the popularity and wide adoption of Bitcoin among investors was evidence of its legitimacy and value beyond being a mere speculative asset.
Illicit financial activity
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 finance.
Gensler pointed out the risks associated with investments in cryptocurrencies and stressed the importance of regulatory frameworks to protect investors from fraud and manipulation.
However, Kernen was quick to point out that crypto only made up a fraction of the percentage of illicit financial flows around the globe compared to the US dollar.
Genlers said in response that Bitcoin was the “token of choice” for ransomware.
