Jessy, Golden Finance
According to a statement released by the U.S. Securities and Exchange Commission, SEC Chairman Gary Gensler, originally set to end his term in June 2026, will leave office early on January 20, 2025.
His departure coincided with the day Trump took office. Trump had promised that if elected, he would fire the 'crypto-unfriendly' Gary Gensler.
During the tenure of this combative chairman, the SEC tightened its stance on the cryptocurrency industry again, launching a series of high-profile lawsuits against crypto companies. Gary Gensler believes that most cryptocurrencies are securities and wants to promote compliance through a series of enforcement actions. However, on the other hand, during his tenure, spot ETFs for Bitcoin and Ethereum were also successively approved.
Golden Finance's review of his resume and policy philosophy reveals that this traditional finance elite, during his tenure at the SEC, was not pleased with the rampant growth of the cryptocurrency industry but was pleased to see crypto become part of traditional finance.
Claims to have a neutral attitude towards blockchain.
Gensler's earliest relationship with the cryptocurrency industry should date back to 2018, when he was teaching at MIT and offered a course related to blockchain, which delved into the technical issues of blockchain and explored the potential impacts of this technology on law and investors. His class gave the impression that he held a neutral and curious attitude towards blockchain.
After he became SEC chairman, some people expected him to have a more forward-looking perspective on virtual currency issues.
However, after Gensler took office as SEC chairman, his attitude changed.
In 2022, the cryptocurrency industry fell into a trough, with a series of projects like Luna and FTX collapsing. The SEC also initiated a major crackdown on the cryptocurrency industry, with lawsuits targeting not only companies but also individuals, including celebrities like Kim Kardashian, for promoting virtual currencies online without disclosing their paid endorsements. More widely known are the SEC's lawsuits against several cryptocurrency exchanges, such as Binance and Coinbase, as well as lawsuits against some crypto projects, such as Luna's parent company, Ripple, and BlockFi. Regarding stablecoins and staking services, during Gary Gensler's tenure, the SEC expressed its stance: stablecoins may be considered securities and need to be registered. In 2023, the SEC charged Kraken for its unregistered staking services, resulting in a $30 million fine.
The series of lawsuits targeting the cryptocurrency industry is actually a clarification of the SEC's regulatory intentions. According to Fortune magazine's reports, every time Gensler attends a congressional hearing, he repeatedly states one thing regarding virtual currencies - 'Come and register.'
He has repeatedly pointed out in public that cryptocurrencies are 'fraught with fraud, scams, bankruptcies, and money laundering.'
Under Gensler's strong regulation, it was unexpected that in 2024, the SEC successively approved spot ETFs for Bitcoin and Ethereum, undoubtedly injecting a strong boost into crypto development.
The seemingly contradictory actions above are actually underpinned by a single logic: to bring cryptocurrencies under U.S. regulation.
Gensler's attitude and actions towards the cryptocurrency industry also largely align with the Biden administration's governing philosophy, as strengthening regulation is one of the main strategies of the Biden administration.
Strong-willed traditional finance elite.
In addition to the cryptocurrency industry, Gensler's other policies during his tenure at the SEC include: promoting reforms in financial market structure, proposing restrictions on payment order flow and high-frequency trading to improve market fairness; advocating for increased disclosure requirements for companies in environmental, social, and governance (ESG) matters to enhance market transparency; and strengthening the crackdown on market manipulation and insider trading, among others.
In the face of emerging technologies, he has shown a parental protective instinct, which is evident in the cryptocurrency industry and also applies to the AI industry. He has focused on how financial companies use artificial intelligence and algorithms to influence customer behavior and has researched how to regulate this technology to protect consumers.
These policies can be simply summarized as strengthening the regulation of financial markets, protecting investors' interests, especially in responding to emerging technologies and addressing some unforeseen events.
Among these new policies, the climate change policy is one of Gensler's most high-profile initiatives, aligning with the Biden administration's efforts to address climate change. However, it has sparked strong opposition from the industry, with companies arguing that the policy requirements are onerous and potentially unconstitutional.
The iron-fisted regulation of the cryptocurrency industry, along with the stringent energy-saving and emission reduction requirements imposed on the industry in response to climate change, have faced opposition from interested parties.
The next president, Trump, stated during his campaign that he would appoint a crypto-friendly SEC chairman and would also increase domestic oil and gas production in the U.S. by relaxing restrictions on fossil fuels and loosening the permitting process for drilling on federal lands.
From the above, it can be seen that some of Gensler's policies will be abolished after Trump takes office.
For the cryptocurrency industry, his tenure basically laid down the regulatory framework for the U.S. approach to the crypto sector. The policies are based on the intent to protect investors and maintain market stability, making them necessary and urgent in the context of the rapid development of the crypto market and the accumulation of risks.
However, his regulatory approach tends to favor enforcement over rule-making, punishing companies without establishing clear rules, leading the industry to feel uncertain about the regulatory direction. This uncertainty is detrimental to the development of the industry; without clear rules, companies do not know what to do or what not to do, severely constraining their growth. Under such policy guidelines, some crypto companies have moved to locations with clearer and more developed crypto regulations, such as Singapore and Dubai.
A detail that can attest to this is the SEC's lawsuit against Coinbase for unregistered securities, while another case was simultaneously underway, where Coinbase filed a lawsuit against the SEC for rule-making. At the time, Coinbase requested the SEC to draft comprehensive rules for the cryptocurrency industry, but the SEC denied their request. Coinbase subsequently filed a legal lawsuit, claiming that the SEC's refusal was 'arbitrary and capricious.'
Gensler has a combative side to his personality, which perhaps is the foundation for his extremely strong regulatory approach. During Obama's presidency, he served as the head of the Commodity Futures Trading Commission (CFTC), where colleagues commented that Gensler displayed great ambition and a tendency to push policies quickly. Earlier, while working at Goldman Sachs, he became one of the youngest partners in the firm's history at the age of thirty. After leaving Goldman Sachs, Gensler entered politics, serving as Assistant Secretary of the Treasury and Deputy Secretary of Domestic Finance.
By sorting out Gensler's resume and policy philosophy, it is not difficult to find that he has made a series of policy moves in line with U.S. national interests. Having a background in traditional finance, he has shown curiosity, skepticism, and disdain for crypto technology, but he cannot resist the development of the times.
During his tenure, he mainly focused on strict enforcement actions against cryptocurrencies, without proactively promoting legislation for their compliant development, displaying his conservatism. The approval of spot ETFs for Bitcoin and Ethereum was merely a consequence of the situation having reached a boiling point, and he simply rode the wave. The deeper reason may be that, representing the interests of traditional financial elites, he dislikes uncontrolled crypto but is pleased to see it become part of traditional finance.
