Home / News / Crypto / Bitcoin / CNBC Anchor Joe Kernen Challenges SEC Chair on Bitcoin Decentralization
Bitcoin
4 min read

CNBC Anchor Joe Kernen Challenges SEC Chair on Bitcoin Decentralization

Last Updated February 15, 2024 12:03 PM
Teuta Franjkovic
Last Updated February 15, 2024 12:03 PM

Key Takeaways

  • In an interview with Squawk Box, Gary Gensler questioned Bitcoin’s decentralization, pointing to concentration on exchanges.
  • CNBC Anchor Kernen defended Bitcoin, highlighting the strengths of its distributed ledger.
  • The SEC Chair’s strategy is centered on regulation, with a focus on protecting investors and tackling illicit activities.
  • Kernen adopted a pro-market viewpoint, raising concerns about whether excessive regulation could inhibit growth.

During a “Squawk Box” interview  on CNBC, news anchor Joe Kernen engaged in a lively debate with SEC Chair Gary Gensler over Bitcoin’s decentralized characteristics.

Gensler’s skepticism about the leading cryptocurrency sparked a broad conversation encompassing topics such as cryptocurrency, investor safeguards, and the fresh endorsement of spot Bitcoin ETFs.

Kernen Defends BTC Against SEC Chair Gary Gensler’s Criticism

Gary Gensler’s comments  during the discussion cast doubt on Bitcoin’s widely praised decentralized nature, suggesting that its decentralization may be overstated.

He pointed out  that the limited number of exchanges facilitating Bitcoin trades indicates a lesser degree of decentralization than commonly believed. Additionally, Gensler has previously described the concept of spot Bitcoin ETFs as “ironic,” highlighting their centralized characteristics.

“It’s not that centralized, Joe,” he said.

He emphasized that the decentralized aspect of cryptocurrency primarily pertains to its accounting ledger. This perspective prompted a vigorous response from Joe Kernen, who defended Bitcoin’s decentralized ledger as a key element that enhances its reliability and attractiveness to investors.

Kernen commented:

“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 also raised a query about the apparent contradiction in stance, questioning why someone who has taught about Bitcoin at MIT would adopt a negative view towards cryptocurrencies.

He challenged Gensler indirectly by comparing him with JPMorgan’s CEO Jamie Dimon by saying:

“You’re so smart. You’re at MIT and people listen what you think about Bitcoin. It’s troublesome to me, if I look at it, and I see all the merits of it, and someone that taught about it and understands it seems to have an opinion that maybe it’s, I don’t know, pet rock-ish or something.”

Gensler Clarifies Regulatory Position on Cryptos

During the interview, Gensler clarified the commission’s neutral stance regarding cryptocurrencies. He explained that the approval of Bitcoin ETFs does not equate to an endorsement of Bitcoin itself but allows for the cryptocurrency’s trading within regulated exchange-traded products (ETPs). Gensler stressed the importance of investor protection and adherence to securities laws, emphasizing the need for companies to offer transparent, honest, and comprehensive disclosures to the public.

However, Joe Kernen challenged  Gensler’s cautious approach towards Bitcoin, suggesting that the SEC’s position appeared more hesitant than neutral. Kernen argued that Bitcoin’s widespread popularity and adoption among investors signify its legitimacy and value, far surpassing the label of a speculative asset.

He asked:

“I think it’s a little less than neutral, Mr. Chairman. I think it almost was, we called it grudgingly, when you finally got. From the court case, sort of forced in it. Is it really just neutral, or wasn’t there a little bit of a: we’re not sure about this thing, and buyer beware?”

Crypto Regulation and Illicit Activity

The CNBC interview delved into the contentious issues of fraud, manipulation, and the speculative nature of cryptocurrencies, alongside discussions on centralization in finance. SEC Chair Gary Gensler highlighted the inherent risks of cryptocurrency investments, underscoring the need for comprehensive regulatory measures to shield investors from fraudulent activities and market manipulation.

In contrast, Joe Kernen emphasized that, compared to the global scale of illicit financial flows, cryptocurrencies account for only a minor fraction, with the US dollar dominating such transactions. In response to Kernen’s points, Gensler remarked that Bitcoin has become the “token of choice” for ransomware attacks, reflecting similar regulatory concerns surrounding the safety of digital currencies.

Was this Article helpful? Yes No