Jessy, Golden Finance
According to a statement released by the U.S. Securities and Exchange Commission (SEC), SEC Chairman Gary Gensler, whose term was originally set to end in June 2026, will leave office early on January 20, 2025.
This date coincides with Trump's inauguration day. Trump has promised that if elected, he would fire the "crypto-unfriendly" Gary Gensler.
During Gensler's tenure, known for his combative personality, the SEC tightened its stance on the crypto industry, launching a series of high-profile lawsuits against crypto companies. Gensler believes that most cryptocurrencies are securities and aims to enforce compliance through a series of enforcement actions. However, on the other hand, during his tenure, both Bitcoin and Ethereum spot ETFs were approved.
Golden Finance has reviewed his resume and policy philosophy, finding that this traditional finance elite is not fond of the wild development of the crypto industry but is pleased to see crypto become a part of traditional finance.
Claims to Have a Neutral Attitude Towards Blockchain
Gensler's earliest relationship with the crypto industry likely began in 2018 when he was teaching at MIT and offered a course related to blockchain. This course delved into the technical issues of blockchain and explored the potential impacts of this technology on law and investors. His class gave the impression that he held a neutral and curious attitude towards blockchain.
After he became SEC Chairman, some people expected him to have a more forward-thinking approach to virtual currencies.
However, after Gensler took office as SEC Chairman, his attitude changed.
In 2022, the crypto industry fell into a downturn, with a series of projects like Luna and FTX collapsing. The SEC also initiated a major crackdown on the crypto industry, with lawsuits extending from companies to individuals, such as lawsuits against celebrities like Kardashian for promoting virtual currencies online without disclosing that they were paid endorsements. More widely known are the SEC's lawsuits against several cryptocurrency exchanges, such as Binance and Coinbase, as well as lawsuits against some crypto projects like Luna's parent company, Ripple, and BlockFi. Regarding stablecoins and staking services, during Gensler's tenure, the SEC indicated its stance: stablecoins may be considered securities and need to be registered. In 2023, the SEC charged Kraken for its staking services not being registered as securities, resulting in a $30 million fine.
The series of lawsuits against the crypto industry actually clarifies the SEC's regulatory intentions. According to Fortune magazine, every time Gensler attended congressional hearings, he repeatedly stated regarding virtual currencies—"Come register."
He has also pointed out in public that cryptocurrencies are "fraught with fraud, scams, bankruptcies, and money laundering."
Under Gensler's strong regulation, it was surprising that in 2024, the SEC approved Bitcoin and Ethereum spot ETFs, undoubtedly injecting a boost into the development of crypto.
These seemingly contradictory actions are actually underpinned by a single logic: to bring crypto under U.S. regulation.
Gensler's attitude and actions towards the crypto industry largely align with the Biden administration's policy philosophy, as strengthening regulation is one of the main strategies of the Biden administration.
Strong-Willed Traditional Finance Elite
In addition to the crypto industry, Gensler's other policies during his tenure at the SEC include: promoting reforms in financial market structure, proposing restrictions on payment order flow and other high-frequency trading practices to enhance market fairness; advocating for increased disclosure requirements for companies regarding environmental, social, and governance (ESG) issues to improve market transparency; and intensifying the crackdown on market manipulation and insider trading, among others.
In the face of emerging technologies, he has shown a paternalistic protective instinct, not only towards the crypto industry but also towards the AI industry, focusing on the impact of financial companies using artificial intelligence and algorithms on customer behavior and studying how to regulate this technology to protect consumers.
These policies can be summarized as strengthening financial market regulation and protecting investor interests, especially in response to emerging technologies and unexpected events.
Among these new policies, the climate change response policy is one of Gensler's most high-profile initiatives, aligning with the Biden administration's efforts to combat climate change, but it has sparked strong opposition from the industrial sector, with companies claiming the policy demands are excessive and potentially unconstitutional.
The iron-fisted regulation of the crypto industry and the stringent energy-saving and emission-reduction requirements to address climate change have faced opposition from relevant stakeholders.
The next president, Trump, has stated during his campaign that he would appoint a crypto-friendly SEC chairman and would increase domestic oil and gas production through measures such as relaxing restrictions on fossil fuels and easing drilling permit processes on federal lands.
From this, it is evident that some of Gensler's policies will be repealed after Trump takes office.
For the crypto industry, under his leadership, the regulatory framework for crypto in the U.S. has been largely established, with policies based on the intention of protecting investors and maintaining market stability. In the context of the rapid development and risk accumulation in the crypto market, these policies are necessary and urgent.
However, his regulatory approach leans towards enforcement rather than rule-making, focusing on punishing companies, which has led to uncertainty about the direction of regulation in the industry. Uncertainty is detrimental to the development of an industry; without clear rules, companies do not know what to do or what not to do, severely constraining their development. Under such a policy framework, some crypto companies have migrated to places with clearer and more comprehensive crypto regulations, such as Singapore and Dubai.
A detail that supports this is the SEC's lawsuit against Coinbase for unregistered securities, while another case is simultaneously ongoing where Coinbase has filed a lawsuit against the SEC for rule-making. At that time, Coinbase requested the SEC to draft comprehensive rules for the crypto industry, but the SEC rejected its request. Coinbase subsequently filed a legal lawsuit, claiming that the SEC's refusal was "arbitrary and capricious."
Gensler has a combative side to his personality, which perhaps underlies his extremely strong regulatory approach. During Obama's presidency, he served as the head of the Commodity Futures Trading Commission (CFTC), where colleagues noted that Gensler exhibited great ambition and a tendency to push policies aggressively. Earlier, he worked at Goldman Sachs, becoming one of the youngest partners at the firm by 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 policy philosophy, it is not difficult to see that he has made a series of policy moves in line with U.S. national interests. As a traditional finance elite, he has experienced curiosity, skepticism, and disdain towards crypto technology, but he cannot resist the development of the times.
During his tenure, he primarily enforced strict actions against crypto without actively promoting legislation for its compliant development, showcasing his conservatism. The approval of Bitcoin and Ethereum spot ETFs was merely a case of the water reaching 98 degrees, and he simply took advantage of the situation. A deeper reason may be that, representing the interests of traditional finance elites, he dislikes uncontrolled crypto but is pleased to see it become a part of traditional finance.
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