Gary Gensler’s reign as Chair of the U.S. Securities and Exchange Commission (SEC) has been characterized by fierce opposition to the cryptocurrency industry, making him a key antagonist in the sector.
However, with his term expiring in 2026 and the upcoming 2024 election potentially leading to a change in leadership, many in the crypto world anticipate a shift away from his enforcement-heavy approach.
Gensler’s tenure began in 2021, during which he made the pivotal decision that no new rules were needed for crypto regulation. Instead, he relied on existing securities laws, particularly the Howey test from the 1940s, to crack down on crypto companies through legal action. This has led to an enforcement-focused regulatory style, which critics argue leaves the industry in the dark, fostering confusion and stifling innovation. Gensler’s refusal to tailor regulations for digital assets has frustrated both industry players and lawmakers.
Congress has also been involved, with the House passing a bill to create crypto-specific rules, though it has yet to pass in the Senate. Meanwhile, the SEC has faced resistance from lawmakers, including a majority vote in the Senate to overturn an SEC crypto accounting policy. Next year’s Congress is likely to be even more involved in crypto matters, especially with members receiving significant financial backing from the industry.
Trump Likely to Show Gary the Door
If Donald Trump wins the 2024 election, Gensler’s exit may be accelerated, as Trump has vowed to fire him. Even if Gensler doesn’t step down immediately, a Trump victory would likely lead to his eventual replacement by a more crypto-friendly commissioner, such as Hester Peirce, a strong advocate for the industry. Conversely, if Vice President Kamala Harris wins, Gensler’s departure may be less urgent, though her administration is expected to take a less antagonistic approach toward crypto.
At Bitcoin Nashville earlier this year, Trump said, “On day one, I will fire Gary Gensler and appoint a new SEC chairman,” Trump said as the crowd went nuts. “I didn’t know he was that unpopular. Let me say it again. On day one, I will fire Gary Gensler.”
Source: X
To Gary’s Credit, He Gave Us Crypto ETFs (reluctantly)
Despite the controversies surrounding Gensler’s approach, some view him as a key figure in legitimizing cryptocurrency, especially after his role in approving spot bitcoin exchange-traded funds (ETFs), a move seen as significant for the mainstream acceptance of digital assets. His legacy in the crypto world may ultimately reflect both his staunch regulatory stance and his unexpected contributions to the industry’s mainstream adoption.
The SEC’s ETF approvals in January, although expected due to legal and market pressure, still came as something of a surprise because of the agency’s historical wariness of crypto investments. Since taking office, SEC chairman Gary Gensler has been particularly vocal about the risks tied to investing in crypto and frequently connected the asset class to frauds and scams.
Despite his public skepticism, Gensler was one of three commissioners to approve the spot BTC ETF offerings. Gensler was likely the deciding vote, with the approval being passed 3-2. Commissioners Hester Peirce and Mark Uyeda approved the ETFs alongside Gensler, while Caroline Crenshaw and Jaime Lizárraga dissented. This indicates how close the ETFs came to being rejected.
In a statement released after the ETFs were approved, Gensler was clear that the SEC does “approve or endorse” Bitcoin despite the approval.
The ETFs have since gone to be one of the most successful ETF launches ever, hitting 20 Billion.
Source: X
An Uncertain Future
The future of the SEC’s crypto regulation is uncertain, with the possibility of a new regulatory framework emerging under different leadership. Whether through Congressional action or a change in SEC leadership, the next few years could mark a significant shift in how the U.S. regulates digital assets. However, the challenges of crafting new laws and handling ongoing court cases will likely remain for whoever succeeds Gensler at the helm.
Since taking over the SEC in 2021, Gary Gensler’s stance on cryptocurrencies has been anything but straightforward. His approach often leaves the industry with a sense of ambiguity. In a recent Oct. 22 interview on Bloomberg Business, Gensler sidestepped a direct question about regulating digital assets, instead offering a birthday nod to Bitcoin, which will turn 16 on Oct. 31, 2024, marking the release of its white paper in 2008.
Gensler reiterated the SEC’s commitment to its current enforcement-based regulatory framework, citing the importance of safeguarding investors from potential risks in the volatile crypto market. “For nine decades, we’ve relied on strong laws passed by Congress and rules from agencies to protect investors and promote capital formation. We’re not changing that now,” Gensler asserted.
When probed about the possibility of Donald Trump winning the 2024 presidential election and the former president’s vow to fire him on his first day in office, Gensler declined to comment. Trump has promised to oust the SEC Chair and launch the World Liberty Financial project if elected, but Gensler remained tight-lipped on his future under a potential Trump administration.
This interview came just after the SEC’s Division of Examinations announced its focus on crypto assets as a top priority for 2025, signaling continued scrutiny of the industry. Despite widespread criticism from business leaders and lawmakers for his hardline stance, Gensler shows no signs of backing off.
As of now, Bitcoin is trading at $67,462, enjoying a 6% price surge in the last month, but still unable to break $70,000.
Source: Brave New Coin Bitcoin Liquid Index
