Gary Gensler has yet to write his resignation letter.
Rapid disinformation attacks are one of the most significant challenges in the digital ecosystem. This time, the news that Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), was suspected of resigning caused an uproar on the Internet.
The news reports ultimately turned out to be a scam, much to the disappointment of the cryptocurrency community. But the controversy centers on artificial intelligence (AI), which essentially means that the troubles for XRP and other crypto assets described as securities by Gensler are not over yet.
Gary Gensler's Exit Rumors
Gary Gensler is one of the few unsavory figures in the cryptocurrency space. As he launches an all-out offensive against the industry, rumors of his exit have brought a much-needed respite to the community. News reports of Gensler’s resignation swept the small crypto media over the weekend. The rumor was also used as an alert by a Twitter account called “whalechart,” which has been viewed more than 1.6 million times.
But the SEC's public relations team refuted the claim.
Later investigations revealed that the story was generated by artificial intelligence (AI), but that didn’t stop the community from thinking about the matter and hoping that he would eventually quit in the near future.
Ryan Selkis, founder and CEO of Messari, said he would not be surprised if Gensler resigned soon, adding that his only political future depends on "exiting gracefully to stabilize this administration in an election year." He further noted that by removing Gensler from office, the Biden administration could potentially turn nearly 50,000 voters to its side.
Gensler was appointed SEC chairman in 2021 and his term will end in June 2026. However, the retirement of Maryland Senator Ben Cardin in 2024 has sparked speculation that Gensler, also from the mid-Atlantic state, will run for the seat. Serkis has previously said that the chances of the SEC chairman becoming Treasury secretary are slim, making a run for Cardin's Senate seat in Maryland a likely candidate.
What does Gensler’s exit mean for crypto?
John Deaton, an amicus curiae, or “friend of the court,” attorney in the SEC v. Ripple lawsuit, said the upcoming political movement could lead to Gensler’s resignation from the securities regulator, which has faced backlash for its enforcement actions against cryptocurrency exchanges and projects in the ecosystem.
The SEC’s legal dispute with Ripple has been going on for more than two years. In addition to XRP, the agency has also designated more than 60 cryptocurrencies as securities and filed legal cases against crypto giants such as Coinbase and Binance under Gensler’s leadership.
From an ally during his time at MIT to taking an authoritarian approach following his appointment at the SEC, Gensler’s views on cryptocurrencies have been controversial, to say the least.
So if the newly proposed SEC Stability Act passes, the legislation would essentially eliminate the position of chairman and create a new role called executive director. This move is intended to protect the securities agency from the influence of political agendas.
The lack of clear regulation, the refusal to approve spot Bitcoin exchange-traded funds, repressive rules for stablecoins, and regulation on custody and fundraising all contribute to a regulatory environment that stifles innovation and financial inclusion.
Gensler’s ouster is therefore expected to be good news for the industry as a whole. While the litigation will continue in court, the move could tip the scales in favor of all the companies and entities Gensler has targeted.
But it is worth noting that cryptocurrency regulation itself is a complex matter. Experts believe that such changes by the SEC, while unlikely, could pave the way for more fraud, market manipulation and other risks.
