(AFP) – The top US securities regulator, a skeptic towards cryptocurrency who was appointed by President Joe Biden, announced Thursday he will step down in January when Donald Trump takes office. Gary Gensler, chair of the Securities and Exchange Commission (SEC), said he will resign on January 20, the same day Trump assumes the presidency. The move clears the way for the president-elect to pick Gensler’s successor.
The news comes as bitcoin hit a fresh record, trading above $99,000 and nearing the symbolic $100,000 level. Gensler’s five-year term does not end until 2026, but agency chairs customarily step down when the party of presidential administration turns over. During the election campaign, Trump promised to fire him.
Gensler took office in April 2021 shortly after the so-called “meme stock” frenzy in January 2021 prompted massive volatility in GameStop and a handful of other stocks. A former mergers and acquisitions partner at Goldman Sachs, Gensler led rulemaking proposals intended to improve efficiency in capital markets. But his future in Washington looked precarious in light of the SEC’s confrontational approach to cryptocurrency throughout the Biden years. Gensler referred to crypto as “the Wild West.”
During the campaign, Trump drew heavy financial support from cryptocurrency backers, some of whom are also close to the Republican’s close ally, Tesla and SpaceX CEO Elon Musk. In the absence of clear regulations, Gensler took an aggressive stance toward digital currencies, treating them like traditional financial securities such as stocks and bonds. The approach has prompted SEC lawsuits against major trading platforms including Binance, Coinbase, and Kraken, along with various smaller startups.
Legislation currently in Congress would shift oversight of cryptocurrency supervision to the Commodity Futures Trading Commission, known for its lighter-touch approach to regulation. Gensler thanked Biden and fellow commissioners, saying in a statement, “The SEC has met our mission and enforced the law without fear or favor.”
But the SEC’s announcement drew cheers from the crypto industry. The Blockchain Association posted a waving hand emoji on X in response to Gensler’s impending exit, while its CEO, Kristin Smith, noted the announcement came the same day as a favorable US court ruling in Texas for cryptocurrency.
The Texas ruling constitutes “a fitting turning point of the SEC’s harassment campaign of the crypto industry, and the beginning of a new era,” Smith said on X. Smith warned Gensler against “sneak” last-minute enforcement and called for a “better-functioning” SEC that avoids overreach and is willing to work “with industry to find fit-for-purpose solutions.”
Hailey Lennon, a partner at law firm Brown Rudnick who was formerly general counsel at Coinbase, said the SEC under Gensler “played gatekeeper and stalled innovation.” Citing Gensler’s departing comments, she wrote on X that “saying the SEC has regulated without fear or favor is insane gaslighting.”
© 2024 AFP
