- Gensler strongly hinted he will depart as SEC chair in wake of Trump’s victory.
- He defended his SEC record, citing court support for crypto-enforcement actions.
It’s only a matter of time.
On Thursday, Gary Gensler, the chair of the Securities and Exchange Commission, defended his record on crypto and strongly hinted he would soon leave the agency in a speech before a legal education institute on Thursday.
President-elect Donald Trump’s victory in the November 5 election virtually assured Gensler’s days at the agency were numbered.
Though Trump is legally barred from fulfilling his campaign promise to fire Gensler, he could demote the former Goldman Sachs executive from his leadership position and appoint a new chair.
Traditionally, SEC chairs typically resign after the election of a new administration.
Precedent
In Thursday’s speech, Gensler indicated that he would follow that precedent.
“It’s been a great honour to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world,” he said, referring to SEC staff.
“I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance.”
Appointed in 2021 by outgoing president Joe Biden, a Democrat, Gensler quickly drew the ire of the crypto industry.
Industry foe
Over half of the crypto-related enforcement actions the SEC has taken since 2015 have come during Gensler’s tenure, according to an analysis by crypto venture capital firm Paradigm.
In media appearances, he insisted the vast majority of crypto tokens were securities like stocks and bonds, and therefore subject to stringent SEC oversight.
Crypto executives and investors, on the other hand, saw in Gensler a rogue bureaucrat who was attempting to sue a growing industry into submission or push it offshore.
‘Let me say it again. On day one, I will fire Gary Gensler.’
— Donald Trump in July
Trump has aggressively courted the crypto industry this year, and found in Gensler a useful punching bag.
When he addressed the crown at Bitcoin 2024 in July, Trump pledged to fire Gensler, and was taken aback by the response.
“I didn’t know he was that unpopular,” Trump said, his voice almost drowned out by attendees’ cheers. “Let me say it again. On day one, I will fire Gary Gensler.”
Proud of his record
Gensler defended his record on Thursday.
“Court after court has agreed with our actions to protect investors and rejected all arguments that the SEC cannot enforce the law when securities are being offered — whatever their form,” he said.
Gensler also stressed that he hadn’t taken aim at crypto writ large. He had never considered Bitcoin as a security, for example.
“Our focus, rather, has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities,” he said.
“That’s less than 20 percent of the whole crypto market and less than one quarter of one percent of the worldwide capital markets.”
Lower fees
Gensler also said it was on his watch that the first crypto-backed exchange-traded funds and products were released in the US.
“Subsequently, in contrast with non-compliant crypto asset markets, investors in these products have gotten the benefits of disclosure, oversight, lower fees, and greater competition,” he said.
“This is a field in which over the years there has been significant investor harm. Further, aside from speculative investing and possible use for illicit activities, the vast majority of crypto assets have yet to prove out sustainable use cases.”
Aleks Gilbert is a DeFi correspondent based in New York. Have a tip? Contact him at aleks@dlnews.com.