Gary Gensler: Regulator or Politician? - 3 Insights from Fortune's Profile

• Gary Gensler's Impact on the Crypto Industry as SEC Chair
• Perceptions of Gensler's Tenure
• Gensler's Past and Future Political Aspirations
• Gensler's Regulatory Approach
• The Intricacies of Crypto Regulation
• The Impact on Interagency Relations

Gary Gensler's Impact on the Crypto Industry as SEC Chair

In 2021, Gary Gensler took up the mantle as chair of the Securities and Exchange Commission. Given his prior education of blockchain courses at MIT, the crypto industry was optimistic about his role. Expectations were that he would strike a balance between upholding existing law and nurturing the growth of the promising industry. However, current opinions reflect disappointment with his tenure.

Perceptions of Gensler's Tenure

Gensler's term as SEC chair has been divisive within the crypto sphere. Critics argue that he has not provided adequate legal clarity to token issuers or assisted Congress in formulating crypto-specific legislation. In fact, some perceive him as pushing an agenda that leans towards personal interests.

Gensler's Past and Future Political Aspirations

Gensler's previous role as chairman of the Commodity Futures Trading Commission (CFTC) showcased his lobbying for expanded agency powers and implementing new regulations. Coupling this with his active involvement in Hillary Clinton's presidential campaign and alliance with Sen. Elizabeth Warren (D-MA), has led to speculation about his aspiration to become Treasury Secretary in the future.

Gensler's Regulatory Approach

With Congress not producing new legislation, Gensler has utilized existing laws to regulate the financial sector. This has resulted in a surge of rule-making from his office, spanning areas from crypto to climate change liabilities reporting. However, this ambitious approach faced pushback, with the process of finalizing rules becoming a challenge for Gensler. Furthermore, his enforcement actions have often been impeded by lawsuits filed by the targeted companies.

The Intricacies of Crypto Regulation

The debate between whether tokens are commodities or securities is crucial to the crypto industry and therefore, to the regulatory agencies as well. This debate has often led to discord between the SEC and the CFTC. Gensler's stance that most tokens should be considered securities and hence, regulated by the SEC, has been met with resistance by the CFTC which advocates for certain tokens to be regulated as commodities.

The Impact on Interagency Relations

In light of this jurisdictional clash, relations between SEC and CFTC have become strained. An insider from the CFTC described the situation as a horrible, dysfunctional marriage. As a result, cooperation between the enforcement arms of both agencies has essentially dissipated.

Edited by Jonathan Stoker