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The appointment of Gary Gensler as head of the US Securities and Exchange is good news for the cryptocurrency industry given his continued and deep interest in technology.
Why is this important: Although the SEC has made some of its views known through law enforcement action etc. under Trump-era President Jay Clayton, the industry longs for even more regulatory clarity.
What they say: “He’s a very smart and thoughtful person, and over the last few years he’s been steeped in crypto, so he’s very, very knowledgeable about the ecosystem and the technology, as well as the company,” says Jerry Brito, executive director of Coin Center, a leading digital currency think tank.
Go back: Gensler, a former banker who served in the Treasury Department and headed the Commodities and Futures Trading Commission, made headlines in 2018 when he joined MIT to teach blockchain technology and as a advisor to the Digital Currency Initiative of the Media Lab.
- He correctly predicted in a 2018 speech that unlike Bitcoin, Ether and XRP digital tokens have characteristics of securities, although their cases are different. In June, William Hinman, director of corporate finance at the SEC, said Ether was not a stock today given his now largely decentralized network, he hinted that his initial issue was likely a securities sale.
- Just days before Clayton stepped down in December, the SEC filed a lawsuit against XRP creator Ripple for allegedly selling unregistered securities.
Yes, but: Despite his interest and appreciation for cryptocurrencies, Gensler’s tenure will not mean a free industry for everyone.
- “He is very committed to securities laws and their enforcement,” Brito says. “I think people have problems with our securities laws, and they mistake that for a problem with the SEC.”
The big picture: Gensler will head a commission that is already no stranger to crypto, even recently by establishing its financial technology (and cryptocurrency) unit as a stand-alone office whose director will now report directly to the president.
- Commissioner Hester Peirce, who was confirmed last year for another five-year term, has also been very friendly to the industry – she has been affectionately dubbed ‘crypto mom’ by many.
And after: In addition to continuing to telegraph its stance on token offerings, other areas where the industry will be keen to gain more regulatory clarity include token trading (particularly “distributed trading”) and custody of coins. crypto-currencies.
- It must, of course, also be approved by the Senate.
The bottom line: Gensler may be well positioned to further bridge the gap between the crypto industry and securities laws, but as chairman of the SEC, he will also need to devote his time to other relevant issues. within the competence of the commission.
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