The bane of the cryptocurrency industry’s existence, Gary Gensler, will step down as Chair of the US Securities and Exchange Commission (SEC). The market surged in response to news of Gensler’s upcoming departure, with Ripple (XRP) up nearly 26%, while Bitcoin (BTC) nears the vital $100,000 mark.
Gary Gensler, the 33rd Chairman of the US Securities and Exchange Commission (SEC), will resign on January 20, 2025 – the day of President-elect Donald Trump’s inauguration.
Gensler to Resign the Day of Trump’s Inauguration
The US Securities and Exchange Commission (SEC) announced that its 33rd Chair, Gary Gensler, will resign on January 20, 2025. Gensler, who chaired the securities regulator since April 2021, is set to resign on the day of President-elect Donald Trump’s inauguration.
The agency announced the news in a press release detailing Gensler's accomplishments since stepping into the role in the aftermath of the GameStop market events.
“He led the agency through a robust rulemaking agenda to enhance efficiency, resiliency, and integrity in the U.S. capital markets. He also oversaw high-impact enforcement cases to hold wrongdoers accountable and return billions to harmed investors,” the SEC said.
Mr Gensler confirmed the news on X (formerly Twitter).
On January 20, 2025 I will be stepping down as @SECGov Chair.A thread 🧵⬇️
— Gary Gensler (@GaryGensler) November 21, 2024
Adding,
“The SEC is a remarkable agency. The staff & the Commission are deeply mission-driven, focused on protecting investors, facilitating capital formation, & ensuring that the markets work for investors & issuers alike. The staff comprises true public servants.”
In a thread, Gensler thanked President Joe Biden for entrusting him with the role, stating:
“The SEC has met our mission and enforced the law without fear or favor.”
While Gensler’s term should technically run until 2026, the Chairman will take early leave as Donald Trump steps into office. The two men share different views on the crypto industry, which has sparked significant tension between them. Trump revealed plans to fire Mr. Gensler on “day one” of his new administration over Gensler's legal action against crypto firms. Under the Biden administration, Gensler and the SEC led a crackdown on the industry with a record high of 46 enforcement actions in 2023, including those against the two largest crypto exchanges, Coinbase and Binance. The chairman has been critical of the crypto industry, which he said is “rife with fraud, rife with hucksters” and “poor compliance.”
The SEC’s Crypto Crackdown
Under Gensler’s leadership, the SEC launched a regulatory crackdown against cryptocurrencies, arguing his own agency as the lone “cop on the beat” working against the bad. On numerous occasions, Gensler said the crypto industry is an unruly space full of bad actors to trick funds out of the pockets of honest citizens. At a budget hearing demanding additional funding to support the agency’s enforcement, Gensler famously said:
“Further, we’ve seen the Wild West of the crypto markets, rife with noncompliance, where investors have put hard-earned assets at risk in a highly speculative asset class.”
Under its intense crackdown on the industry, the SEC was accused of being extra-judicial when it comes to cryptocurrencies. The agency’s insistence on getting cryptocurrencies declared as securities so that they fall under its purview led to severe action against certain crypto companies without any congressional oversight. The U.S. House Financial Services Committee called its actions into question, which summoned Gensler to clarify the SEC’s rulemaking and approach to the industry. The SEC faced significant criticism under Gensler’s reign, which many deemed a “reckless regulatory assault” on crypto.
Ripple’s XRP Surges As News Spreads
While the SEC’s enforcement actions were only recently called into question, it has long been embroiled in a highly publicized legal battle with Ripple Labs. In 2020, the regulator sued Ripple for its supposed breach of securities laws, resulting in many exchanges, such as Coinbase, Kraken, Bitstamp, and Gemini, which decided to delist XRP. Ripple finally found some relief after a partial victory in 2023 brought an end to the SEC’s 3-year-long crusade against the company. The Southern District of New York Court delivered a partial victory to Ripple in its matter with the SEC after Judge Analisa Torres ruled that Ripple’s XRP token is “not necessarily a security on its face.”
Unsurprisingly, Gensler said he was “disappointed” in Judge Torres’ ruling. Gensler’s dismay elicited serious clapback from Ripple CEO Brad Garlinghouse, who blamed the SEC for the regulatory “mess” surrounding cryptocurrencies. Garlinghouse commented:
“The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction Where’s that gotten us? Consumers left holding the bag in bankruptcy court while the SEC holds press conferences.”
A large part of the industry undoubtedly shares Garlinghouse’s sentiments.
XRP has traded up by nearly 25% since the announcement of Gensler’s upcoming departure, reaching a day-high of $1.43.
The crypto market and community have naturally responded very well to the news, with Bitcoin (BTC) nearing the $100,000 mark. X has become a minefield of much-needed comedic responses from industry giants.
Is it true that the SEC only works one day a month in the office?
— Elon Musk (@elonmusk) November 21, 2024
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
