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During his tenure at the SEC, this traditional financial elite was not happy to see the brutal development of the crypto industry, but was happy to see crypto becoming a part of traditional finance.
Jessie, Golden Finance
According to a statement released by the U.S. Securities and Exchange Commission (SEC), SEC Chairman Gary Gensler, whose term was originally scheduled to expire in June 2026, will resign early on January 20, 2025.
The day he left office was the day Trump took office. Trump promised to fire ‘crypto-unfriendly’ Gary Gensler if elected.
During this very belligerent chairman’s tenure, the SEC once again tightened its stance towards the crypto industry and launched a series of high-profile lawsuits against crypto companies. Gary Gensler believes most cryptocurrencies are securities and wants to pass a series of enforcement actions. Promotes compliance. However, on the other hand, Bitcoin and Ethereum spot ETFs were also passed one after another during his tenure.
Golden Finance reviewed his resume and policy philosophy and discovered that while he was at the SEC, this traditional financial elite was not happy to see the brutal development of the crypto industry, but was happy to see crypto become part of traditional finance.
Claims to be neutral about blockchain
Gensler’s initial relationship with the crypto industry began in 2018. At the time, Gensler was teaching at MIT and offering blockchain-related courses that explored and discussed the technical challenges of blockchain. Will it affect the law and investors? His class gave me the impression that he was neutral and curious about blockchain.
After he became chairman of the SEC, there were expectations that he would develop more forward-looking thinking on virtual currency issues.
But after Gensler became SEC chairman, his attitude changed.
In 2022, the cryptocurrency industry fell into a recession, and a series of projects such as Luna and FTX collapsed. The SEC also filed a large-scale lawsuit against the cryptocurrency industry. The scope of lawsuits has also expanded from companies to individuals. For example, lawsuits have been filed against celebrities such as Kardashian on the grounds that cryptocurrencies are ‘importing goods.’ This is a paid endorsement without disclosing the actual content. More widely known are the lawsuits filed by the SEC against several cryptocurrency exchanges such as Binance and Coinbase, and against some crypto projects such as Luna’s parent company Ripple, BlockFi, and others. Regarding stablecoins and staking services, during Gary Gensler’s tenure, the SEC expressed its attitude toward stablecoins and staking services. Stablecoins may be securities and may require registration. In 2023, the SEC accused Kraken of failing to register its staking service as Kraken. As a result, a fine of $30 million was paid.
The succession of lawsuits against the cryptocurrency industry actually clarifies the SEC’s regulatory intentions. According to Fortune Magazine, every time Gensler attended a congressional hearing, he kept saying the same thing about the virtual currency issue: “Come and submit.”
He has also directly pointed out several times publicly that cryptocurrencies are “full of scams, scams, bankruptcies, and money laundering.”
What is surprising, under this strong oversight of Gensler, is that in 2024, the SEC approved back-to-back spot ETFs for Bitcoin and Ethereum, which undoubtedly gave another boost to crypto development.
The seemingly contradictory actions above are actually all based on the same logic: to bring cryptocurrencies under US supervision.
Gensler’s attitude and actions toward the cryptocurrency industry are basically consistent with the Biden administration’s policy philosophy. Strengthening supervision itself is one of the Biden administration’s main strategies.
powerful traditional financial elite
In addition to the crypto industry, Gensler’s other policies during his tenure at the SEC generally include the following aspects: Promoting structural reforms in financial markets, proposing restrictions on high-frequency trading activities such as payment order flow to improve market fairness; Strengthen environmental, social and governance (ESG) disclosure requirements for companies and improve market transparency. Strengthen efforts to crack down on market manipulation, insider trading, and other practices.
This shows everyone’s desire for protection against the development of emerging technologies. This is the same in the cryptocurrency industry, and the AI industry is also concerned about the impact of financial companies’ use of artificial intelligence. We study intelligence and algorithms about customer behavior and how to regulate this technology to protect consumers.
The above policies can be briefly summarized as strengthening supervision of financial markets and protecting investors’ interests, especially in response to emerging technologies and emergencies.
Policies to combat climate change are among Gensler’s most high-profile policies. The move is consistent with the Biden administration’s efforts to combat climate change, but it has drawn strong opposition from industry, who say the policy’s requirements are onerous and unconstitutional. .
Strict regulation of the crypto industry and stringent energy conservation and emissions reduction requirements for the industry to combat climate change have been opposed by relevant stakeholders.
President-elect Trump said during his campaign that he would increase the number of domestic cryptocurrencies in the U.S. by electing a cryptocurrency-friendly SEC chairman, easing restrictions on fossil fuels and easing the drilling permit process on federal lands. Oil and gas production.
From the above, we can see that some of Gensler’s policies will be repealed after Trump takes office.
Regarding the crypto industry, during his tenure, regulation of the crypto industry in the United States was basically established, and its policies were based on the intention to protect investors and maintain market stability in the context of rapid development and risk accumulation. “Such a policy is necessary and urgent in the cryptocurrency market.”
But his regulatory approach favors enforcement over rulemaking and punishes only companies, leaving the industry uncertain about the direction of regulation. Uncertainty is not conducive to industrial development. Without clear rules, companies don’t know what to do and what not to do, which severely limits their development. In response to these policies, some crypto companies have moved from the United States to places with more complete and clear encryption regulations, such as Singapore and Dubai.
One thing that confirms this is that the SEC filed an unregistered securities lawsuit against Coinbase, while Coinbase also filed a rulemaking lawsuit with the SEC. At the time, Coinbase requested the SEC draft comprehensive rules for the cryptocurrency industry, but the SEC rejected the request. Coinbase later filed a legal complaint, calling the SEC’s rejection “arbitrary and capricious.”
Gensler’s character has a very aggressive side, and it is perhaps this character that gives rise to his extremely strong directorial abilities. When Obama was president, he served as chairman of the Commodity Futures Trading Commission (CFTC). Colleagues said at the time that Gensler was ambitious and eager to pursue a variety of policies. Previously, he worked at Goldman Sachs, and at age 30, he became one of the youngest bankers ever to partner at Goldman Sachs. After leaving Goldman Sachs, Gensler entered politics, serving as Deputy Secretary of the Treasury and Deputy Secretary of the Domestic Treasury.
Looking at Gensler’s resume and policy philosophy, it is easy to see that he has taken a series of policy actions simply to serve America’s national interests. As a member of the traditional financial elite, he had curiosity, suspicion, and disdain for cryptography. Although technology exists, we cannot reject the advancement of the times.
During his tenure, he focused on strict law enforcement measures against encryption and demonstrated conservatism by not actively pursuing legislation to comply with and develop encryption. The approval of Bitcoin and Ethereum spot ETFs is just a sign that the water has boiled to 98 degrees, and he is pushing the boat forward. The deeper reason may be that, representing the interests of the traditional financial elite, he does not like uncontrolled crypto, but is happy to see it become part of traditional finance.
기자：Golden Finance
This article is the view of a PANews columnist, does not represent the position of, and assumes no legal liability for, PANews. Articles and views do not constitute investment opinions.
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**To what extent does the article portray Gary Gensler’s approach to cryptocurrency regulation as a balancing act between investor protection and fostering innovation?**
**The Gensler Effect: Friend or Foe to Crypto?**
For this special episode, we’re joined by two expert guests to dissect the impact of Gary Gensler’s tenure as SEC Chair. Our guests are:
* **[Guest 1 Name]:** [Guest 1 Credentials & Short Bio]
* **[Guest 2 Name]:** [Guest 2 Credentials & Short Bio]
Join us as we explore the different facets of Gensler’s legacy, delve into his motivations, and analyze the future of crypto regulation in the US.
**Part 1: The Traditionalist vs. the Crypto Space**
* **Host:** Welcome, everyone. Let’s dive right in! Gary Gensler has been lauded both as a protector of investors and criticized for stifling crypto innovation. [Guest 1], you’ve written extensively about Gensler’s background and policy approach. Could you paint a picture of his mindset and motivations regarding the cryptoIndustry?
* **Guest 1:** [Response based on materials provided: beschreiben Gensler’s background in traditional finance, his focus on investor protection, and his skepticism towards unregulated innovation. Emphasize his interest in bringing crypto under existing regulatory frameworks.]
* **Host:** [Guest 2], you’ve been actively involved in the crypto space for several years. How did you perceive Gensler’s approach? Did you see his policies as supportive of the industry’s growth, or did they create unnecessary hurdles?
* **Guest 2:**[ResponsehighlightingbothpositiveandnegativeelementsofGensler’sapproach;acknowledgetheneedforregulationbutalsocriticizethelackofclarity
emphasis on enforcement over rulemaking, and the potential for stifling innovation ]
**Part 2: Regulation by Enforcement: The Right Approach?**
* **Host:** One common criticism of Gensler’s approach is his emphasis on “regulation by enforcement.” [Guest 1], is this a sustainable strategy, and what message does it send to the crypto industry?
* **Guest 1:** [Response analyzing the efficacy of this approach. Discuss the potential benefits (deterring illegal activity) and drawbacks (lack of clarity, uncertainty for legitimate players]. Perhaps explore alternatives like comprehensive rulemaking through collaborative efforts.
* **Host:** [Guest 2], Coinbase’s recent lawsuit against the SEC is a prime example of the friction this approach generates. What are the risks associated with relying primarily on lawsuits to shape the regulatory landscape?
* **Guest 2:**[ResponsefocusingonthechillingeffectoninnovationthelegaluncertaintyitcreatesforbusinessesandthepotentialforstiflingthegrowthoftheUScryptosector
**Part 3: The Future of Crypto Under a New Administration**
* **Host:** With President Trump poised to take office and accelerate the shift towards cryptocurrency-friendly policies, how do you anticipate Gensler’s stricter regulatory approach will be affected?]
* **Guest 1:**[AnalysisofthepotentialchangesincryptopolicyunderthenewadministrationExplorehowTrump’spromisesmightcounterGensler’slegacyDiscussthebalancebetweenholdingfirmsaccountableandfosteringanenvironment
conducive to innovation.
* **Host:** [Guest 2], what are your hopes for the future of crypto regulation under a new administration? What changes would most benefit the long-term growth and adoption of cryptocurrencies?
* **Guest 2:**[Responseexpressingoptimismaboutafuturewheremoredefinedrulesexistemphasizingthe
importance of clear regulations that provide clarity for businesses while still protecting consumers.
**Part 4: Closing Thoughts**
* **Host:** Thank you both for your insightful contributions. We’ve covered a lot of ground today, and it’s clear that the debate regarding crypto regulation will continue, with various stakeholders vying for a seat at the table. As we move toward this next chapter, what’s the crux of this ongoing debate?
[Both guests share closing thoughts summarizing their chief arguments and offering a final perspective on the future of crypto regulation.]
