Author: Sam Lyman; Compiled by: Luffy, Foresight News
WASHINGTON DC – SEC Chairman Gary Gensler has established close ties with members of both houses…
Who will watch the watchers?
As federal bureaucracies continue to expand in budget and scope, this age-old question becomes increasingly important.
- RWA Discussion: Underlying Assets, Business Structure, and Development Path
- Understanding Autonomous Worlds: The Future of Full-Chain Gaming
- EmblemVault bringing BRC-20 to ETH: is it a good or bad thing?
But as the US government develops, the influence of the fourth estate is also growing. Social media allows a new generation of citizen journalists to hold public officials accountable by scrutinizing their past positions. In recent weeks, attention has focused on SEC Chairman Gary Gensler.
As the SEC ramps up its regulation of cryptocurrency, members of Congress have been pressuring Gensler to change his stance on cryptocurrencies. Through the work of professional reporters and amateur detectives, the inconsistencies between Gensler’s past and present statements have surfaced on Twitter. This decentralized community is watching the watchmen.
What have they found? Gensler’s views on cryptocurrencies have undergone a significant shift. Here is a timeline of his journey from industry ally to opponent.
Phase One: Ally (2018-2020)
While Gensler’s recent enforcement actions have made him a pariah in the industry, it hasn’t always been that way. Many cryptocurrency insiders once saw him as a forward-thinking regulator and friend. Before taking over at the SEC, Gensler worked in academia for three years, where he gained a reputation as a public leader who saw the innovative potential of cryptocurrencies.
2018
Gensler gave a speech to a group of hedge fund managers about the policy impact of emerging cryptocurrencies. In his speech, he made it clear that Bitcoin, Ether, Litecoin, and Bitcoin Cash “are not securities.” As these tokens accounted for the majority of cryptocurrency trading volume at the time, he said, “Three-quarters of this market might not be securities.”
That same year, Gensler began researching digital assets at MIT and teaching blockchain and cryptocurrency-related courses at the university. There, he gave a speech that openly discussed the question: are cryptocurrencies securities or commodities? His answer was, “Both. I know that’s not a lot of people’s favorite answer, but that’s where we are right now.”
2019
Gensler spoke at a fintech conference in New York City, where he praised Algorand and its chief developer, Silvio Micali (who was Gensler’s colleague at MIT). Gensler called Algorand’s project “a great technology,” with a blockchain that is highly efficient, “you can create an Uber on it.”
According to a Binance lawyer, later that year, Gensler himself applied to become an advisor to the cryptocurrency exchange and even had a special meeting with Binance CEO Changpeng Zhao in Japan. (Gensler has yet to refute this claim).
2020
Gensler taught his last course on blockchain and cryptocurrency at MIT. His lectures are available online, leading many to believe that if he were to re-enter public service, he would take a supportive stance on innovation in cryptocurrency. With Biden’s election as president, speculation grew that he would nominate Gensler as chairman of the Securities and Exchange Commission.
Phase Two: The Skeptic (2021-2022)
As it turned out, President Biden did appoint Gensler as SEC chair. Given Gensler’s past public statements and praise for various crypto projects, many in the crypto community cheered his appointment. For example, Senator Cynthia Lummis wrote on Twitter, “While the SEC has a reputation for being an innovation black hole, Gary Gensler has recognized the potential of crypto assets.”
In fact, with Gensler’s appointment, the mood in the halls of Congress was sunny and optimistic. But it wasn’t long after his arrival that Gensler’s attitude toward cryptocurrency began to shift.
2021
In news statements and public comments about cryptocurrency, Gensler’s tone shifted from open to skeptical — in some cases even hostile.
The chairman of the Securities and Exchange Commission began calling for stronger regulation, calling cryptocurrency the “Wild West” full of fraud. He went on to say, “I believe that many tokens in these cryptoasset trading platforms are securities, under our law.”
Nevertheless, Gensler acknowledged that cryptocurrency remains in a regulatory gray area. He said that congressional legislation would help provide greater clarity for the industry, as “these crypto assets are not being regulated either by the SEC or our sister agency, the CFTC, in any significant way.”
2022
Gensler emphasized the narrative of the “Wild West” even more forcefully. “I believe that the vast majority of the nearly 10,000 tokens in the cryptocurrency market are securities,” Gensler said in a speech to the entire agency in September. Just two months later, the cryptocurrency exchange FTX went bankrupt, proving some of Gensler’s assertions correct.
Phase III: Opponent (2023-Present)
After FTX’s disastrous defeat, Gensler’s skeptical attitude turned into opposition. The SEC was tired of waiting for Congress to pass legislation and instead took an enforcement regulatory approach, initiating a series of Wells Notices and lawsuits against high-profile cryptocurrency exchanges.
Only one problem: the new strategy required Gensler to “swallow” all of his previous statements about cryptocurrency.
2023
In an interview with New York Magazine, Gensler said that “everything except Bitcoin” is a security, which is a clear departure from his 2018 statement that several major cryptocurrencies were not securities and that many tokens had commodity features.
Gensler said that “the cryptocurrency market lacks regulatory compliance, not transparency,” which contradicts his own demand in 2021 that Congress pass legislation to increase transparency in the cryptocurrency industry.
Although Gensler claimed in 2021 that cryptocurrency lacked a clear regulatory framework at the SEC, he now believes that “the law is clear” and all cryptocurrency exchanges must register with the SEC.
Despite reports that Gensler offered to serve as an advisor to cryptocurrency giant Binance in 2019, the SEC is currently suing the company for market manipulation and misuse of customer funds. The US Securities and Exchange Commission has also sued Coinbase, alleging that the latter listed “unregistered securities.”
Speaking of unregistered securities, the SEC claims in the lawsuit that ALGO is such a security. Remember, ALGO is the native token of Algorand, and Gensler praised the protocol as a breakthrough technology in 2019.
Gensler’s “Anchoring Strategy”
So why did Gensler suddenly reverse his attitude?
Like what you're reading? Subscribe to our top stories.
We will continue to update Gambling Chain; if you have any questions or suggestions, please contact us!
