On Jan. 14, 2025, Gary Gensler had a farewell interview on CNBC. On January 20, he will step down as the chairman of the SEC. What were their conclusive words to the crypto community?
At the very start of the interview, the host, Andrew Ross Sorkin, makes a remark that sets the context. He notes that even in the last few days of Gensler’s tenure as the SEC chair and launch of the Trump administration 2.0, Robinhood brokers had to settle $45 million SEC charges associated with violations of ten law provisions.
At that time, Sorkin didn’t know that after the interview, the SEC would rekindle the case against Ripple.
Sorkin’s smart tone-setting remark paints Gensler as a soldier relentlessly fighting to protect the prehistoric laws from the burgeoning cryptocurrency sector. Let’s see what Gary told the CNBC hosts over various topics during an exit interview.
Trump 2.0 as pro-crypto administration
Admitting that donors from the crypto field were prominent in sponsoring Trump’s campaign, Gensler noted that the election was not about cryptocurrencies.
He mentioned that his predecessor, Jay Clayton, who will serve in the new Trump administration, brought up 80 cases during his past tenure. It seems that Gensler is hinting that the new administration is not going to tolerate lawbreakers, no matter how pro-crypto it is.
Gensler’s epitome: cryptos are securities. Period
Sorkin pointed out that Gensler, during his tenure, has been battling crypto companies, leaning on the existing laws while not working on creating the laws that would have factored the changing reality in.
This question is really genuine as Gensler is known as a person who tends to equate most cryptocurrencies to unregistered securities, which is a very uncomfortable way to perceive crypto for crypto companies.
Instead of pushing the new rules to efficiently regulate crypto, Gensler was trying to shove crypto into an already existing law configuration, no matter how inadequate it is for crypto. Mostly, these laws were not created with cryptocurrencies in mind and mostly predating their vast presence.
Gensler insists that most cryptocurrency projects must adhere to the laws regulating securities, and in many instances, they fail to comply. Despite the initial interest in Bitcoin, the SEC-era Gensler doesn’t see crypto as something that never existed before and sticks to his guns, repeating a “cryptos are nothing but unregistered securities” mantra.
Answering Sorkin’s question, he said crypto is mostly traded leaning on the sentiment and not fundamentals, but if (sic!) the fundamentals are there, crypto companies should make disclosures adhering to the securities laws.
Bitcoin is not a security, but other cryptocurrencies are dangerous
Gensler said that Bitcoin is not a security now (sic!), but other thousands of cryptocurrencies pose a threat to the investing public, and it’s his duty as a law enforcement agent to protect these people from fraud, money laundering and other crimes. “There has been too much of that in this field,” Gensler said. More than that, he is sure that the exchanges are “trading against their customers.”
As for Bitcoin, Gensler compared the first cryptocurrency to gold and noted that it is a highly volatile speculative asset, but people want to trade it. However, Gensler said he cannot predict the future of Bitcoin, and he doesn’t know whether it will have any value in 10 or 20 years from now.
Sorkin said that Gensler’s attempts to fight Bitcoin were in vain as at the end of Gensler’s era, Bitcoin was as popular as never before. At the same time, Gensler failed to prevent this great bubble from blowing (if it proved to be a bubble). Twice, Gensler dodged to comment on how he feels about his role in both of these scenarios, none of which portrays him as a winner. Listing his main achievements as the SEC chair, he mentioned reforms in the stock market policy and other sectors not related to cryptocurrencies.
Afterword
It is interesting how Gary Gensler went from a tech-savvy official genuinely intrigued by the potential of blockchain technology to a rigid gatekeeper in just two years. In 2019, he wrote an inspired editorial on the future of Bitcoin for CoinDesk. In 2021, he became the most notorious cryptocurrency foe in SEC history.
A person who famously called stablecoins “poker chips” for gambling, he dedicated his time in the SEC to legal battles with Binance, Coinbase, Ripple, and Gemini while overlooking the FTX collapse. Hopefully, now that he is retiring, he will find peace. He says he never owned any cryptocurrencies. Who knows what’s next for Gensler, will he soften his heart to Bitcoin?
