Gensler declared war on “fraudsters” and “hucklers” — and took celebrities to task when they promoted little-known coins to their millions of followers, without disclosing they had been paid to do so.
Confirmation that Gary Gensler would step down as SEC chair when Donald Trump takes office was met with unfiltered contempt from the crypto community.
The one-time lecturer on blockchains and digital currencies has widely been regarded as an aggressive enemy to the industry.
Kristin Smith of the Blockchain Association claimed that the SEC’s clampdown on the sector was hugely disproportionate, considering crypto represented a mere 0.25% of global markets.
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But when you peel away the combative rhetoric, which clearly comes from a group of people with a vested interest in regulation, it can be argued that Gensler was well-intentioned from the get-go.
A seasoned investment banker with a thorough knowledge of Wall Street and Washington, he amassed a deep understanding of blockchain technology long before it was fashionable.
Just a few highlights from Gensler’s professional bio:
- 18 years at Goldman Sachs
- Assistant Secretary of the U.S. Treasury during the Clinton’s Presidency
- Member of the Sarbanes-Oxley Act team
- Chairman of U.S. CFTC during Obama’s Presidency
- Gensler taught a course on blockchain at MIT
- Since 2021 the Chairman of the U.S. SEC
And throughout his stint at the top of the SEC, his motivation was clear: shielding impressionable consumers from devastating financial harm.
Gensler declared war on “fraudsters” and “hucksters” — and took celebrities to task when they promoted little-known coins to their millions of followers, without disclosing they had been paid to do so.
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While the fines handed to the likes of Kim Kardashian amounted to nothing more than a slap on the wrist, multi-year bans on posting about digital assets had a bigger impact — deterring other A-listers tempted by the prospect of a quick payday from doing the same.
And given how countless cryptocurrencies have delivered astronomical gains, prompting inexperienced investors to pile into the space, Gensler’s determination to educate the public is well-founded.
Despite all of this, the history books will show the outgoing SEC chair did make a few missteps.
He faced uncomfortable scrutiny over his dealings with Sam Bankman-Fried, especially considering he held private talks with the entrepreneur in the months before FTX collapsed.
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While that platform went bankrupt after misappropriating billions of dollars in customer funds, the SEC was focusing its efforts on going after exchanges like Coinbase — a publicly listed company that had tried to find a path forward with the regulator but was rebuffed.
Exchange-traded funds based on Bitcoin’s spot price may also have launched years earlier had it not been for Gensler’s repeated delays and interventions.
The astronomical performance of these ETFs since their debut on Wall Street perhaps shows how the SEC underestimated the demand for indirect exposure to the cryptocurrency’s fluctuations.
Gensler’s focus on investor protection came at the expense of innovation — but when a new chair is appointed, the opposite could be true.
If the crypto sector is allowed to run amok with little oversight, it’s the little guy who could end up bearing the consequences.
Gary Gensler: An Enemy to Crypto, But Well-Intentioned was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.