As a Democratic-affiliated SEC Commissioner, Gary Gensler has shifted his regulatory role to a politician seeking to be appointed as Treasury Secretary according to some Congressmen.
The nomination of the 33rd Chair of the United States Securities and Exchange Commission (SEC), Gary Gensler on April 17, 2021, was viewed as a huge relief in the crypto space. Nearly three years later, the former Goldman Sachs Investment banker has turned against the crypto in what seems like pleasing the Oval Office for future favors. In a recent detailed piece by news outlet, Fortune, Democratic congressman Ritchie Torres, argued that Gensler is a mere politician who is masquerading as a regulator. Furthermore, Gensler has continued to advocate for the crypto market to be regulated under decades-old securities laws, which could significantly cripple web3 innovation in the United States compared to other jurisdictions.
Gensler’s Crypto War Slowed by Lawsuits
Having failed to work with the United States Congress to formulate clear crypto laws during the first months of his tenure, Gensler turned to the Howey test to regulate crypto assets, less Bitcoin (BTC), as securities. Moreover, the predecessor Jay Clinton, who was nominated by former President Donald Trump in 2017, left the current SEC administration to deal with the Ripple Labs case, which is expected to shed a lot of light on crypto assets in the United States.
Earlier this year in July, the Judge presiding over the SEC vs Ripple case ruled that XRP sales on centralized exchanges do not constitute investment contracts, thus not securities. “Litigation over the SEC’s jurisdiction and others could short-circuit Gensler’s broader agenda if such suits lead to judicial rulings that curb the agency’s powers,” Fortune noted.
Meanwhile, the odds of the US SEC approving a spot Bitcoin exchange-traded fund (ETF) significantly spiked after the agency lost the case against Grayscale Investment. Interestingly, the US SEC has met with representatives of several spot Bitcoin ETF applicants including BlackRock Inc (NYSE: BLK).
CFTC vs SEC Debate
In regards to the crypto regulatory oversight, a Fortune reporter highlighted that the US SEC Chair has caused a lot of confusion even to lawmakers. Moreover, Gary Gensler has argued that Bitcoin is a commodity, which puts it under the CFTC’s jurisdiction, but has continued to push for its oversight. Speaking to the media outlet, Summer Mersinger, a CFTC commissioner, cited the Coinbase Global Inc (NASDAQ: COIN) employee case that involves insider trading.
While the CFTC wanted to file its case against the Coinbase employee, the US SEC claimed jurisdiction, thus leading to low communication between the two agencies.
“Cooperation between our enforcement and their enforcement is essentially gone,” Mersinger told Fortune.
While the Gensler tenure is slated to end by June 2026, several lawmakers have vowed to oust him for causing more harm to investors. Meanwhile, the Fortune report highlighted that Gensler is eyeing to be nominated for the Treasury secretary position, thus exposing the poor relationship with the crypto industry.
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