December 23, 2024
The cryptocurrency industry in 2024 saw a sharp divide between heroes and villains. Gary Gensler and anti-crypto politicians led regulatory hurdles that cast a shadow over it while hackers exploited loopholes, causing massive losses.
However, figures like Donald Trump, Coinbase, and Hester Peirce have emerged as champions, calling for clarity, innovation, and a crypto-friendly future.
Bad Guys: Who's Undermining Cryptocurrencies in 2024?
Gary Gensler and the SEC
In 2024, Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), emerged as one of the most controversial figures in the cryptocurrency industry. Known for his aggressive regulatory stance, Gensler has become a villain in the eyes of many crypto enthusiasts and industry players. His tenure was marked by aggressive enforcement actions and regulatory ambiguity that left crypto companies uncertain about their compliance requirements.
Under Gensler’s leadership, the SEC requested an unprecedented $2.6 billion to crack down on cryptocurrency markets, signaling a more aggressive stance against the industry. However, his heavy-handed approach has begun to draw significant backlash. A U.S. judge sanctioned the SEC for improperly using its authority in a cryptocurrency case, a moment that heightened concerns about regulatory overreach.
Gensler’s lack of clarity on what constitutes digital security has added to the frustrations. While testifying before Congress, Gensler faced tough questioning about the lack of clear rules, especially regarding Ethereum.
Gensler’s alignment with the Biden administration added fuel to the fire. Concerns peaked when it was reported that Vice President Kamala Harris was considering appointing Gensler as Treasury Secretary, leaving the crypto community on edge. Biden and Harris’ perceived hostility toward crypto has cemented their status as rivals in 2024.
Gensler has announced his impending resignation, due in early 2025, as calls for accountability grow. He is expected to be replaced by Paul Atkins, who will take over in January and is a more crypto-friendly candidate who has given the industry a glimmer of hope.
Pirates: North Korea and Beyond
Hackers continued to plague the cryptocurrency market in 2024, causing $2.1 billion in losses by Q3 alone. Some of the most notable incidents include:
Radiant Capital suffered a $50 million hack, which was later traced to North Korean cybercriminals.
Hackers bypassed Coinbase's anti-money laundering systems, stealing $15.9 million.
Bitfinex Hack: After years of investigation, one of the perpetrators of the infamous Bitfinex hack was sentenced to five years in prison for laundering $10 billion, along with his wife who was sentenced to 18 months.
Sec's Twitter account was hacked, leading to a massive investigation that ended with an arrest.
These attacks, along with North Korea’s evolving tactics, reflect the ongoing threat of cybercrime in the crypto space. Even high-profile celebrities have fallen victim to crypto-related hacks.
Football stars Kylian Mbappe and Lionel Messi have faced cryptocurrency scams. Recently, Drake’s X account was hacked to promote a scam meme coin.
In contrast to the anti-crypto forces, Donald Trump has emerged as the most prominent champion of the crypto industry. Trump’s pro-crypto rhetoric ahead of the 2024 US presidential election has galvanized the industry. He has laid out a comprehensive plan to regulate cryptocurrencies, promising to remove restrictive rules and foster innovation.
Trump vowed to fire Gary Gensler and recently replaced him with Paul Atkins, signaling a radical shift in the SEC’s approach. Trump’s vision has extended even further, including plans to create a Bitcoin reserve as part of U.S. fiscal policy.
He has also committed to reforming outdated cryptocurrency laws beyond Gensler. As part of his commitment, Trump recently appointed David Sachs as a point person to dismantle Operation Chuck Point 2.0, a policy believed to target crypto-friendly financial institutions.
Additionally, Trump’s proposal to create a D.O.G.E. (Department of Government Efficiency), with the participation of influential figures such as Elon Musk and Vivek Ramaswamy, added a humorous but symbolic touch to his pro-crypto campaign.
Coinbase: The Industry's Corruption Whistleblower
Cryptocurrency exchange giant Coinbase has played a crucial role in exposing unfair practices by US regulators. The company revealed that the FDIC advised banks to restrict cryptocurrency services.
The move has raised concerns about institutional biases against digital assets. Coinbase’s efforts to defend highlighted the need for a balanced regulatory approach to protect innovation.
In late October, Coinbase CEO Brian Armstrong highlighted growing discontent within the cryptocurrency industry over what many see as excessive regulatory oversight. He also criticized the agency for opaque enforcement actions during Gensler’s tenure.
Furthermore, Armstrong pointed to some controversial statements made by the financial regulator. Accordingly, he demanded that the next SEC chief withdraw what he called “frivolous cases” and apologize to the American people.
“The next SEC Chairman should withdraw all frivolous lawsuits and issue an apology to the American people. It will not undo the damage done to the country, but it will begin the process of restoring confidence in the SEC as an institution,” Armstrong posted.
Hester Pierce: Voice of Reason
Within the SEC, Hester Peirce has continued to champion innovation in cryptocurrencies. Her public admission of flaws in the agency’s enforcement procedures was a rare moment of introspection within the regulator. Peirce has remained a beacon of hope, advocating for clear rules and fair treatment for cryptocurrency companies.
“We knew in advance that there were legal questions about whether we had the authority to do what we did, but we moved forward,” Pierce said.
As Gensler prepares to step down and Trump’s vision gains momentum, 2025 promises to be a transformative year. The industry’s resilience in the face of adversity reflects its ability to thrive, provided it can overcome these challenges with strong leadership and clear regulation.