Former President Donald Trump wanted to fire him on his first day in office after winning the US election. Bradley Tusk, CEO of USK Ventures, recently called him “the worst regulator in crypto.” He remains the most hated person on the crypto planet: Gary Gensler, chairman of the US Securities and Exchange Commission (SEC).
Gensler, a former Goldman Sachs partner and MIT professor, took the helm of the SEC in 2021 with a reputation as a tough regulator, after being nominated by President Joe Biden. Initially, the community thought he might be the perfect candidate to chair the SEC and was sympathetic to the crypto industry because of his traditional finance background. However, his aggressive stance on cryptocurrencies has put him at odds with crypto enthusiasts and entrepreneurs.
Since his appointment in February 2021, Gensler has become a divisive figure in the crypto community, with his actions and policies being heavily criticized. When one goes to his X account and looks at the comments, you will see that they are filled with hate.
Gensler today looks like a villain of the crypto industry. Not only the crypto community but also figures like former President Donald Trump disagree with Gary's stance on the crypto industry. Currently, crypto enthusiasts and entrepreneurs are calling for him to resign as SEC chairman.
Friction Between the Crypto Community and Gary Gensler
The period from 2022 to 2023 saw escalating tensions between Gensler and the crypto community. One of the most significant points of contention was the SEC's approach to regulation through enforcement rather than issuing clear regulations.
Since Gary was confirmed by the US Senate as SEC chairman in 2021, the number of crypto-related enforcement cases has surged to a 10-year high according to Cornerstone Research.
According to an official report released by Cornerstone Research, the SEC took 46 enforcement actions against crypto companies in 2023, double the number in 2021 and the highest since 2013. Furthermore, the SEC imposed $281 million in fines for settlements and tripled the number of administrative proceedings compared to 2022.
Since Gary was confirmed by the U.S. Senate as SEC chairman in 2021, the number of crypto-related enforcement cases has increased to a 10-year high, according to Cornerstone Research. Under Gary Genser’s leadership, the Commission’s actions against the crypto industry increased by 50% in 2022 and 53% in 2023.
This aggressive stance continued afterward, with high-profile cases against major companies such as Binance, Ripple, Kraken, and Coinbase. In this regard, Coinbase stated that before the Commission took action against them, they met with Commission officials more than 30 times but never received a response.
Most industry leaders say this approach creates uncertainty, stifles innovation and forces companies to operate in a regulatory gray area. Many accuse Gensler of overstepping the SEC’s authority and applying outdated securities laws to new technology without proper guidance.
Gary's Unpopular Policy in Crypto
There are a number of policies and statements by Gensler that have been criticized by the crypto community. He has been heavily criticized for repeatedly stating that most cryptocurrencies should be classified as securities. This stance adds another layer of difficulty for many crypto projects and exchanges as they grow.
The SEC’s actions against crypto lending platforms by requiring them to provide unregistered securities were also criticized by the community. Additionally, despite approving Bitcoin futures ETFs, the continued rejection of Bitcoin spot ETF applications disappointed many crypto enthusiasts at the time.
While Gensler often cites investor protection as his primary motivation, many in the crypto community argue that his policies limit investor choice and opportunity.
Why did Trump say he would fire Gary Gensler?
At the Bitcoin 2024 conference, former US President Donald Trump announced that he would fire SEC Chairman Gary Gensler on his first day in office. It is well known that Trump is a cryptocurrency advocate and he has been highly critical of Gensler's approach to cryptocurrencies.
According to Coincub’s report, the United States has dropped from sixth to eighth place in the global cryptocurrency adoption rankings in 2023, partly due to regulatory uncertainty. Trump has promised the community to make Bitcoin great again by implementing more favorable regulations and providing clearer guidelines for the industry.
Trump's views have resonated with many in the crypto community, who believe that Gensler's strict approach to crypto is holding the industry back from innovation and growth in the field. By promising to remove Gensler and appoint a more crypto-friendly SEC chairman, Trump wants to restore trust and foster a more supportive environment for crypto development in the United States.
Final thoughts
The animosity between Gary Gensler and the cryptocurrency community reflects a fundamental tension between regulation and the cryptocurrency space. While Gensler believes his strict stance on cryptocurrencies is important to protect investors and maintain market integrity, it has also been a major obstacle to the growth of the industry. Critics say his approach is too rigid and fails to appreciate the unique characteristics of blockchain technology.
