SEC Chief Gary Gensler’s Evolving Stance on Cryptocurrency
In the beginning
Before Gensler’s appointment to the SEC in 2021, and in the pre-Covid cryptocurrency boom, he was considerably more optimistic about the blockchain’s prospects.
- He wrote in an op-ed for CoinDesk in December 2019 that he was intrigued by the potential of Satoshi’s innovation to spur change.
- He believed that blockchain had the potential to lower verification and networking costs, promote economic inclusion, and lower economic rents and data privacy costs.
Gensler and the FTX fiasco
After the collapse of FTX cryptocurrency exchange in November, Gensler became tougher on the industry.
- Lawmakers criticized Gensler and the SEC for not being alert to FTX’s wrongdoing sooner and failing to protect investors.
- US representative Ritchie Torres labeled Gensler as “singularly responsible” for the FTX catastrophe.
Lawsuit fatigue
Gensler has been waging lawsuits against FTX, Binance, and Ripple platforms.
- He believes that these platforms often co-mingle and trade against users, which is not allowed in traditional securities markets.
- Gensler has stated that the cryptocurrency industry is rife with fraud and hucksters.
After almost six months of attrition warfare, Gary Gensler had crypto on the ropes. But a pair of recent legal setbacks have scored some victories for the digital asset industry as platforms seek to avoid being recognized as securities.
- An appeals court overturned the SEC’s decision to block Grayscale Investments’ proposed spot Bitcoin ETF, potentially opening the floodgates for more products the SEC deems unsafe for retail investors.
- Gensler has also introduced more new rules and regulatory proposals to the financial sector than any of his predecessors since the 2008 financial crisis.
