Following the news that the Securities and Exchange Commission (SEC) is charging crypto protocol Algorand’s creators and issuers for selling unregistered securities, crypto enthusiasts are sharing an old clip of SEC head Gary Gensler praising Algorand when he was a professor at MIT back in 2019. But what does Gensler really say in this lecture?
Essentially, the speech is pro-crypto — but barely focused on Algorand itself. Gensler praised Algorand at the end of his speech when he was asked how crypto could become more decentralized. Algorand was used as an example by the SEC chair, but he admitted that the protocol still had flaws; the issue of who would edit the software was unresolved, for one, but more importantly it remained unclear whether crypto tokens were securities. Gensler then criticized decentralized exchanges, saying they weren’t necessarily decentralized.
Despite the lecture not actually focusing on Algorand, it’s an interesting watch. The lecture came with disclaimers, nuances, and unsettled dilemmas. Gensler opened his speech with a positive note on crypto and blockchain, comparing their impact on FinTech with the telephone’s impact on the stock exchange.
Gensler explained the original aims and ideological principles of the early cypherpunks and Bitcoin proponents rather succinctly. He said that the intranet evolved into the internet, bringing more decentralization, but that blockchain advocates dream to make the internet truly a decentralized network. He spoke fondly of Hal Finney and proudly remarked that Satoshi Nakamoto uploaded Bitcoin’s code on Github with an MIT open-source license.
Caution and criticism of cryptocurrency provided a balance to Gensler’s pro-crypto words. When he spoke in 2019, he said crypto wasn’t ready to receive huge amounts of venture capital — but venture capital had poured $30 billion into crypto in the past 18 months. The SEC chair warned that crypto is rife with fraud and scams, and that mass adoption would take five or ten years at best.
One of the most interesting points that Gensler raised throughout the lecture was that despite the fact that crypto was acting as an agent of change by, for example, spurring central banks to move closer to digital payments, crypto itself may not be the change-agent.
The lecture is a recommended listen for anyone interested in crypto and raises many nuances and complex issues which are still being debated today. For anyone keen to understand Gensler’s thoughts on crypto, this lecture is a good place to start.