Gary Gensler makes the latest pitch on how the Securities and Exchange Commission should be allowed to regulate cryptocurrency markets ahead of the Trump administration and its enthusiasm for digital assets.
In remarks prepared for a legal conference Thursday in New York, the Securities and Exchange Commission chairman reiterated that the agency should focus on “rules of the road” that apply to cryptocurrency sales and intermediaries such as brokers and exchanges to promote proper disclosure.
The experience of the Great Depression, when so many investors were wiped out and the economy went into recession, taught policymakers the importance of "disclosure provisions because securities information creates a public good," Gensler said at the Practitioner's Institute's annual conference on securities regulation.
Gensler reiterated that Bitcoin itself is not a security, a position taken by his predecessor during the first Trump administration, Jay Clayton.
"Our focus has rather been on some of the 10,000 or so other digital assets," which together represent about $600 billion, or less than 20% of the crypto market when Bitcoin, Ether and stablecoins are taken out, he said.
Fading Days
Gensler commented on how the clock is starting to run on the current administration and, potentially, on its approach to cryptocurrency regulation. The next Republican administration at the Securities and Exchange Commission likely won’t share his view of the digital asset industry as non-compliant, or that participants should be subject to the same decades-old securities regulations as traditional exchanges and issuers.
President-elect Donald Trump has promised to create a crypto-friendly regulatory framework, create a strategic reserve of bitcoin, and make the U.S. a global hub for the industry. Once a cryptocurrency skeptic, Trump changed tact after digital asset firms spent big during the election campaign to promote their interests.
The Heritage Foundation’s 2025 project promised to significantly reduce the size and powers of the SEC’s watchdog agency. While Trump has distanced his political views from the 2025 project, some of his allies, like Elon Musk, have vowed to pursue similar plans through the recently announced Department of Government Efficiency.
"Elections have consequences, and they should," Gensler said. "I'm proud to continue to lead Chairman Clayton," he said. "We haven't really been that different," referring to the lack of disclosure from the industry and crypto intermediaries who don't keep their various businesses separate.
Court Cases
Gensler weighed in on the SEC's legal victories over cryptocurrency investment products. "Court after court has agreed with our efforts to protect investors and rejected all arguments that the SEC can't enforce the law on securities offerings, no matter what form they take," he said.
But far fewer cryptocurrency cases could soon end up in court. The agency’s two Republicans and the one nominated and confirmed to lead the agency are likely to reverse what many in the industry see as a blitz against firms for failing to register their platforms or tokens.
The two Republican commissioners have already discussed how to divide control of the SEC portfolio until a final chair is confirmed, according to several people familiar with the matter. In some scenarios, Mark Uyeda, the younger of the two, would be appointed by Trump as acting chairman, while Hester Peirce, affectionately known as “Crypto Mom” by digital asset fans, would have full executive authority over cryptocurrency-related matters, said the people, who requested anonymity to describe the private discussions.
All such scenarios would depend on Trump's final decision. Representatives for Pierce and Uyeda declined to comment.
Other personnel changes are also underway, with some of Gensler's top officials planning their departures. Jessica Wachter, head of economic and risk analysis, and Haoxiang Zhu, head of trading and markets, are leaving in December to resume teaching positions at the Wharton School and the Massachusetts Institute of Technology, respectively.
Both universities have confirmed that officials will return in January.
DERA plays a role in the SEC’s rulemaking, providing estimates of the economic impact and costs of compliance, among other analyses. Zhu’s unit has been engaged in a major rethink of market structure. Some of these efforts are making significant changes to global markets and could improve financial resilience during the next crisis, such as moves to centrally clear U.S. Treasury trading or shorten the equity settlement cycle.
Other major projects likely won't be completed, including new best-execution requirements for stock trading and a concept for submitting trade orders to auctions between exchanges and wholesalers such as Citadel Securities and Virtu Financial Inc.
Wachter and Zhu did not respond to requests for comment. A spokesman for the Securities and Exchange Commission said the agency does not comment on personnel matters.
