Since Donald Trump’s victory in the recent US presidential election, there has been much speculation that Securities and Exchange Commission (SEC) Chairman Gary Gensler, a villain in the crypto community, will step down before his term ends.
Gensler, who is known for his hardline stance against crypto companies in the United States, has been the target of criticism from the community for months now. Trump has promised to fire him on his first day in office while many prominent figures including Gemini co-founder Tyler Winklevoss have called him “the absolute devil” and USK Venture CEO Bradley Tusk has called him “the worst regulator in crypto.”
Gensler is also facing a lawsuit filed by Republican attorneys general from 18 states, accusing him and the SEC of committing serious constitutional violations in cryptocurrency-related regulations in the United States.
It is now certain that Gensler will lose his seat, however, many critics have also called for a prison sentence for him, accusing him of using his arbitrary powers to target the cryptocurrency industry. Calls to boycott any organization associated with Gensler following his tenure at the SEC have gained traction online.
In this article, we will fact-check social media claims that Gensler could go to prison for his actions as SEC chairman.
Gary Gensler's tenure at the SEC
Gary Gensler was nominated by President Joe Biden to be SEC Chairman in 2021 and he comes with a reputation as a tough regulator. A former MIT professor and Goldman Sachs partner, Gensler is expected to be soft on the burgeoning cryptocurrency scene in the United States due to his finance background.
However, his aggressive stance on cryptocurrencies has put him at odds with crypto enthusiasts and entrepreneurs. Since Gary was confirmed by the U.S. Senate as SEC chairman in 2021, the number of cryptocurrency-related enforcement cases has surged to a 10-year high, according to Cornerstone Research.
According to a whitepaper published 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.
During his tenure, Gensler led several high-profile enforcement actions in the cryptocurrency space, including lawsuits against Ripple, Coinbase, and Uniswap. He asserted that most cryptocurrencies are securities and emphasized the need for regulatory oversight.
Should Gary Gensler Go to Jail: Fact Check
Under the guidelines set for the SEC, the President of the United States has the power to appoint five commissioners to the SEC and designate one of them as chairman. However, the President does not have the power to fire the chairman and that person can complete his or her five-year term.
Another important thing to note is that Gensler and the SEC are currently facing a civil lawsuit, not a criminal one. Therefore, it is highly unlikely that Gensler will go to jail over this current unconstitutional lawsuit.
Furthermore, the United States Criminal Justice System has provisions for legal action against federal officials; however, this is only done in cases of corruption or excessive use of force. Additionally, a federal official cannot be prosecuted under any state law in the United States.
Therefore, under the current circumstances, Gensler will not be facing jail time and the widespread claims that he is likely to be arrested are false.