Jessy, Golden Finance
According to a statement released by the U.S. Securities and Exchange Commission, SEC Chairman Gary Gensler, whose term was originally scheduled to end in June 2026, will leave office early on January 20, 2025.
His departure comes on the day Trump takes office, and Trump has promised to fire "crypto-unfriendly" Gary Gensler if he is elected.
During the tenure of this very combative chairman, the SEC once again tightened its attitude towards the crypto industry and launched a series of high-profile lawsuits against crypto companies. Gary Gensler believes that most cryptocurrencies are securities and wants to promote compliance through a series of law enforcement actions. However, on the other hand, during his tenure, Bitcoin and Ethereum spot ETFs were also approved one after another.
Golden Finance's review of his resume and governance philosophy reveals that this traditional financial elite did not favor the wild development of the cryptocurrency industry during his tenure at the SEC, but welcomed its integration into traditional finance.
Claims to have a neutral attitude towards blockchain.
Gensler's earliest relationship with the cryptocurrency industry should date back to 2018, when he was teaching at MIT and had offered a course related to blockchain. This course delved into the technical issues of blockchain and explored the potential impacts this technology could have on law and investors. His class gave the impression that he held a neutral and curious attitude towards blockchain.
After he became the SEC chairman, some people expected him to have more forward-thinking views on virtual currencies.
However, after Gensler took office as the chairman of the SEC, his attitude changed.
In 2022, the cryptocurrency industry fell into a slump, with a series of projects like Luna and FTX collapsing. The SEC also launched a major crackdown on the cryptocurrency industry, with lawsuits extending from companies to individuals. For instance, it sued celebrities like Kardashian for promoting virtual currencies online without disclosing that they were being paid endorsements. More widely known are the SEC lawsuits against several cryptocurrency exchanges, such as Binance and Coinbase, as well as lawsuits against some cryptocurrency projects like Luna's parent company, Ripple, and BlockFi, etc. Regarding stablecoins and staking services, during Gary Gensler's tenure, the SEC expressed its stance that stablecoins may be considered securities and require registration. In 2023, the SEC charged Kraken for not registering its staking services as securities, resulting in a $30 million fine.
The series of lawsuits against the cryptocurrency industry is essentially a clarification of the SEC's regulatory intentions. According to Fortune magazine's reports, every time Gensler attends congressional hearings regarding virtual currencies, his repeated message is - 'Come register.'
He has repeatedly pointed out in public that cryptocurrencies are 'fraught with fraud, scams, bankruptcies, and money laundering.'
Under Gensler's strong regulation, surprisingly, in 2024, the SEC approved the spot ETFs for Bitcoin and Ethereum, which undoubtedly injected a strong boost into the development of cryptocurrency.
The seemingly contradictory behaviors above are actually all under one logic, which is to bring cryptocurrency under U.S. regulation.
Gensler's attitude and actions towards the cryptocurrency industry largely align with the Biden administration's governance philosophy, as strengthening regulation is one of the main strategies of the Biden administration.
Strong-handed traditional financial elite
In addition to the cryptocurrency industry, Gensler's other policies during his tenure at the SEC broadly include the following aspects: promoting reforms in financial market structure, proposing restrictions on payment order flow and other high-frequency trading practices to enhance market fairness; advocating for strengthened disclosure requirements from companies regarding environmental, social, and governance (ESG) matters to improve market transparency; and increasing the crackdown on market manipulation, insider trading, and other behaviors.
In the face of the development of emerging technologies, he has shown a protective instinct typical of a patriarch. This is evident in the cryptocurrency industry as well as in the AI sector, where he is concerned about the impact of financial companies using artificial intelligence and algorithms on customer behavior, and is researching how to regulate this technology to protect consumers.
These policies can be simply summarized as strengthening regulation of financial markets, protecting investor interests, particularly in response to emerging technologies and some unforeseen events.
Among these new policies, those addressing climate change are one of Gensler's most high-profile new initiatives. This move aligns with the Biden administration's efforts to combat climate change but has sparked strong opposition from the industry, with companies claiming that the policy is overly demanding and potentially unconstitutional.
The iron-fisted regulation of the cryptocurrency industry and the stringent energy conservation and emissions reduction requirements to address climate change have faced opposition from relevant stakeholders.
The next presidential candidate, Trump, stated during his campaign that he would appoint a crypto-friendly SEC chairman and would also seek to increase domestic oil and gas production in the U.S. by relaxing restrictions on fossil fuels and easing the permitting process for drilling on federal land.
As can be seen, some of Gensler's policies will be abolished after Trump comes to power.
For the cryptocurrency industry, during his tenure, he essentially laid the foundation for the U.S. regulation of the cryptocurrency sector. His policies were based on the intention to protect investors and maintain market stability, and in the context of rapid development and risk accumulation in the cryptocurrency market, these policies were necessary and urgent.
However, his regulatory approach leans towards enforcement rather than rule-making, focusing on punishing companies, which has led to uncertainty in the industry's regulatory direction. Uncertainty is not conducive to the development of an industry; for companies, without clear rules, they do not know what to do or what not to do, which severely restricts their growth. Under such a policy framework, some cryptocurrency companies have migrated from the U.S. to places like Singapore and Dubai, where the cryptocurrency regulations are more developed and clearer.
A detail that corroborates this is the SEC's lawsuit against Coinbase for unregistered securities, while another case was simultaneously ongoing, where Coinbase filed a rulemaking lawsuit against the SEC. At that time, when Coinbase requested the SEC to draft comprehensive rules for the cryptocurrency industry, the SEC denied the request. Coinbase subsequently filed a legal lawsuit, claiming that the SEC's refusal was 'arbitrary and capricious.'
Gensler has a very combative side to his personality, which perhaps forms the basis for his extremely strong regulatory approach. During Obama's presidency, he served as the head of the Commodity Futures Trading Commission (CFTC), where colleagues remarked that Gensler exhibited great ambition and a characteristic eagerness to push various policies. Even earlier, while working at Goldman Sachs, he became one of the youngest bankers among Goldman partners at the age of thirty. After leaving Goldman Sachs, Gensler entered politics, serving as Assistant Secretary of the Treasury and Deputy Secretary of Domestic Finance, among other positions.
Reviewing Gensler's resume and governance philosophy, it is not difficult to find that his series of policy actions were made under the premise of aligning with U.S. national interests. Coming from traditional financial elites, he has had curiosity, skepticism, and disdain for cryptocurrency technology, but he cannot resist the development of the times.
During his tenure, he primarily focused on strict enforcement actions against cryptocurrencies, not actively promoting legislation for their compliant development, demonstrating his conservativeness. The approval of Bitcoin and Ethereum spot ETFs was merely taking advantage of a situation that had reached a boiling point. A deeper reason may be that, representing the interests of traditional financial elites, he does not favor uncontrolled cryptocurrency but welcomes its integration into traditional finance.
