U.S. presidential candidate Donald Trump has promised to fire the head of the Securities and Exchange Commission on his first day in office. Let’s deep dive into Gensler’s career and the scandals surrounding his name.
At the Bitcoin 2024 conference, Trump said that he would replace current SEC chief Gary Gensler with someone who will not block America’s future. The audience began chanting Trump’s name.
“On day one I will fire Gary Gensler.”
Donald Trump, U.S. presidential candidate
Gensler is known for his hard-line stance on the crypto industry, repeatedly claiming that the sector is rife with speculators. Under his leadership, the SEC has prosecuted numerous crypto companies and executives, including lawsuits against the Coinbase platform and Binance founder Changpeng Zhao, as well as lawsuits against exchanges Kraken, Gemini, payment provider Ripple Labs, and Consensys.
Table of Contents
Coinbase demands access to Gensler’s personal correspondence
Gensler to resign in 2025
Gensler’s appointment to SEC head and unfulfilled promises
What is happening in the U.S. political arena?
American states criticize SEC over crypto regulation
Calls for Gensler to be fired
Should Gensler fear for his position as head of the SEC?
Coinbase demands access to Gensler’s personal correspondence
Crypto exchange Coinbase filed a petition with the court demanding that the SEC provide documents related to its lawsuit against the company.
The firm’s general counsel, Paul Grewal, said the request includes, among other things, personal communications from Gensler. According to Grewal, the documents are necessary for the company to formulate a defense strategy. He also criticized the SEC for refusing to engage in constructive dialogue.
Today we are asking the Court to order @SECGov to produce important documents in discovery, including documents related to the tokens the SEC included in its complaint against @coinbase, the SEC’s consideration of our public offering, and statements Chair Gensler has made in his…
— paulgrewal.eth (@iampaulgrewal) July 23, 2024
Before this, the regulator noted that providing documents is cumbersome, and the requested papers do not directly relate to the case.
The case concerns an SEC lawsuit against Coinbase that was filed in June 2023. The regulator accuses the company of violating securities laws.
Gensler to resign in 2025
Earlier this week, 10x Research founder Markus Thielen said Gensler will resign early next year. According to the report, he may leave his post in the first two months of 2025.
Thielen noted that, as a rule, the heads of the SEC resigned when there was a change of the White House administration. Thus, Donald Trump‘s victory in the U.S. presidential election will be considered a disaster for Gensler.
“Historically, this meant that the SEC chair resigned when a new administration was elected, despite SEC Chair Gensler’s term ending on June 5, 2026. He will most likely resign by January/February 2025.”
Markus Thielen, 10x Research founder
Thielen assessed U.S. President Joe Biden‘s withdrawal from the election race as meaning that Trump would become the new president. In addition, he believes that with Biden dropping out of the U.S. presidential race, none of the other candidates can seriously challenge Trump.
“The November election appears to have been decided without a single vote. For Bitcoin, a pro-crypto administration will enter the White House.”
Markus Thielen, 10x Research founder
Gensler’s appointment to SEC head and unfulfilled promises
The previous head of the SEC, Jay Clayton, left office in December 2020, shortly after Biden won the presidential election. He took over as head of the department on May 4, 2017. During his tenure, the SEC obtained over $14 billion in fines and refunds and returned $3.5 billion to investors.
Under Clayton’s leadership, regulated futures were launched on Bitcoin (BTC) and Ethereum (ETH), but applications to launch exchange-traded funds (ETFs) based on BTC were never approved.
In April 2021, the U.S. Senate approved Biden’s nomination of Gensler to head the SEC.
"A warm congratulations to Gary Gensler on his Senate confirmation to become Chair of the SEC. He will be joining a dedicated staff that works tirelessly day in and day out on behalf of investors and our markets. 1/2
— U.S. Securities and Exchange Commission (@SECGov) April 14, 2021
Shortly before his appointment to a new position in March 2021, Gensler spoke positively about blockchain, BTC, and cryptocurrencies. He also called digital gold a “catalyst for change” and promised to work to promote innovation if elected.
SEC Chair nominee, Gary Gensler: "#Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion, but they've also raised new issues of investor protection… If confirmed at the SEC, I will work to promote innovation" pic.twitter.com/AlAsUPJONY
— Bloqport (@Bloqport) March 2, 2021
What is happening in the U.S. political arena?
On July 21, Biden announced that he was leaving the presidential race. The politician said he would address the nation with more detailed information about his decision this week.
pic.twitter.com/RMIRvlSOYw
— Joe Biden (@JoeBiden) July 21, 2024
Biden’s decision was preceded by a failed debate, coronavirus infection, and a sharp rise in the popularity of his main rival, Trump, amid an assassination attempt. Vice President Kamala Harris may become the new Democratic presidential candidate. Biden himself proposed her candidacy.
For crypto community members, Biden’s withdrawal from the election race is positive news. The market reacted to the politician’s decision with a slight increase.
The best result in the politifi category, which includes political meme coins, was recorded by the Kamala Harris token (KAMA). During the day, the coin increased in price by 43%. Also, in the top ten coins were many Trump-related tokens. For example, Pepe (TRUMP) increased its price by more than 20% in 24 hours, according to the Coingecko data.
You might also like: Joe Biden quits campaign: What it means for crypto
American states criticize SEC over crypto regulation
A coalition of seven U.S. states led by Iowa Attorney Brenna Bird earlier said the SEC had grabbed power and exceeded its authority. Thus, the regulator stifles innovation and harms the crypto industry.
Bird said that the regulator bypasses Congress and existing consumer protection laws. The SEC is giving itself new powers, and in an illegal way. Specifically, the SEC violates the Administrative Decision Procedure Act and the Essential Issues Doctrine.
“Just as the SEC cannot regulate trading baseball cards as securities, neither can the SEC regulate cryptocurrencies here. Perhaps cryptocurrencies are moving in interstate commerce, but the SEC must do more than rely on theory—especially given no findings supporting such an approach from Congress.”
Brenna Bird, Iowa Attorney
Calls for Gensler to be fired
Last year, American politicians repeatedly advocated the dismissal of Gensler from the post of head of the SEC.
Thus, in April 2023, Republican Warren Davidson, a Representative from Ohio in the U.S. House of Representatives, announced that he would introduce a bill that would require Gensler to resign from his post as head of the SEC.
Yep. To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board (where authority resides). Former Chairs of the SEC are ineligible. https://t.co/VBnkgt8bhM
— Warren Davidson 🇺🇸 (@WarrenDavidson) April 16, 2023
Later, the politician again proposed removing the Chairman of the Commission from office. The reason was the court’s verdict in favor of Grayscale on converting the company’s GBTC into an ETF, contrary to the regulator’s position.
In addition, Senator Tim Burchett introduced a proposal to cut Gensler’s salary to $1. House Rules Committee spokesman Steve Womack also stressed that the SEC has been a “victim of abuse” and “has become an undue financial burden on the government.”
You might also like: Congressman calls for Gary Gensler removal, SEC accountability in 2024
Should Gensler fear for his position as head of the SEC?
Sarah Brennan, General Counsel for Delphi Venture, believes that the lack of clarity in cryptocurrency regulation in the U.S. today is due to Gensler. During his years as chairman, much of the damage he caused to the crypto industry was due to the lack of a policy framework that provided a path to compliance
“Gensler was driven purely by politics and thus failed at driving good policy outcomes to the detriment of all.”
Sarah Brennan, General Counsel for Delphi Ventures
Gensler’s tenure as head of the SEC has not met expectations. The candidate nominated by Biden, who initially supported cryptocurrencies, is remembered in the industry as the initiator of many lawsuits against blockchain companies. If the Republicans win, Gensler’s likelihood of remaining in office seems even less likely, especially in light of Trump’s embrace of cryptocurrency-friendly policies.
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