SEC Chair’s Evolving Views on Crypto Industry Examined


Newsflash: Gary Gensler is not a fan of the cryptocurrency industry.

The chair of the Securities and Exchange Commission has been steadfast in his opposition to the digital-asset sector since his appointment in 2021 – receiving both praise from cryptocurrency skeptics and backlash from its supporters.

On Tuesday, America’s chief regulatory body encountered its most severe setback yet – when an appeals court overturned its decision to block a spot Bitcoin exchange-traded fund proposed by Grayscale Investments.

Despite this, Gensler is undeterred, continuing to double down on his rhetoric as the SEC delves further into the cryptocurrency sphere. Let’s take a look at how his views on the industry have developed.

At the Start

Prior to Gensler’s appointment to the SEC in 2021, and during the pre-Covid cryptocurrency boom, he had a much more positive outlook on the blockchain’s potential.

In an op-ed for CoinDesk in December 2019, he said: “Though thousands of projects have yet to land on widely adopted use cases, I remain intrigued by Satoshi’s [the alleged creator of Bitcoin] innovation’s potential to spur change – either directly or indirectly as a catalyst.”

“The potential to lower verification and networking costs is worth pursuing, especially to reduce economic rents and data privacy costs, and promote economic inclusion,” he added. 

Gensler and the FTX Fiasco 

After the dramatic collapse of Sam Bankman-Fried’s cryptocurrency exchange FTX in November, Gensler adopted a much tougher stance on the industry, coming under fire for his role in the disaster.

US representative Ritchie Torres wrote to the SEC, accusing Gensler of being “singularly responsible” for the FTX crisis, according to Fortune Crypto.

As 2023 has progressed, Gensler has become increasingly hardline on crypto, launching lawsuits against FTX, Binance, and Ripple.

“The platforms often are trading against you and have market-makers that are on the other side of your trades. We don’t allow that in the rest of our securities markets,” he told Bloomberg TV in July. “The securities laws are there to protect you, and this is a field rife with fraud, rife with hucksters. There are good-faith actors as well, but there are far too many that aren’t.”

Lawsuit Fatigue

After months of legal battles, Gary Gensler had crypto on the ropes. However, a couple of recent legal setbacks have given the digital asset industry some wins, as platforms try to avoid being classified as securities in order to avoid higher regulatory scrutiny.

The SEC’s most painful defeat came on Tuesday when an appeals court overturned its decision to block Grayscale Investments’ proposed spot Bitcoin ETF. The ruling could open the door for the potential launch of products the SEC believes are unsafe for retail investors. The regulator is currently reviewing the decision.

Gensler is in the spotlight this week not only for crypto. The Committee on Capital Markets Regulation found that the SEC chief has imposed more new rules and regulatory proposals on the financial sector than any of his predecessors since the aftermath of the 2008 financial crisis, the FT reported.

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