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U.S. presidential candidate Donald Trump has promised to fire the head of the Securities and Exchange Commission (SEC) on his first day in office. Let’s delve into Gary Gensler’s career and the controversies surrounding him.
Trump’s Stance on Gensler
At the Bitcoin 2024 conference, Trump stated he would replace current SEC chief Gary Gensler with someone more supportive of America’s future. The audience responded by chanting Trump’s name.
“On day one I will fire Gary Gensler.” – Donald Trump, U.S. presidential candidate
Gensler is known for his strict approach to the crypto industry, often describing it as rife with speculators. Under his leadership, the SEC has prosecuted numerous crypto companies and executives, including lawsuits against Coinbase, Binance founder Changpeng Zhao, and exchanges like Kraken, Gemini, Ripple Labs, and Consensys.
Coinbase Demands Access to Gensler’s Personal Correspondence
Crypto exchange Coinbase filed a petition demanding the SEC provide documents related to its lawsuit against the company. Paul Grewal, the firm’s general counsel, stated that the request includes Gensler’s personal communications. According to Grewal, these documents are essential for the company’s defense strategy. He also criticized the SEC for refusing constructive dialogue.
“Today we are asking the Court to order the SEC to produce important documents in discovery, including those related to the tokens the SEC included in its complaint against Coinbase, the SEC’s consideration of our public offering, and statements Chair Gensler has made.” – Paul Grewal
The SEC noted that providing these documents is cumbersome and not directly related to the case, which concerns a lawsuit filed in June 2023 accusing Coinbase of violating securities laws.
Gensler to Resign in 2025?
Earlier this week, Markus Thielen, founder of 10x Research, suggested that Gensler might resign early next year. He may leave his post in the first two months of 2025, especially if Trump wins the presidential election. Historically, SEC chairs have resigned when a new administration takes over, despite Gensler’s term ending on June 5, 2026.
“He will most likely resign by January/February 2025.” – Markus Thielen, 10x Research founder
Thielen also assessed U.S. President Joe Biden’s withdrawal from the election race as likely leading to Trump’s victory, which would be detrimental for Gensler.
“For Bitcoin, a pro-crypto administration will enter the White House.” – Markus Thielen
Gensler’s Appointment and Unfulfilled Promises
Jay Clayton, the previous SEC head, left office in December 2020. Under his leadership, the SEC collected over $14 billion in fines and refunds and launched regulated futures on Bitcoin (BTC) and Ethereum (ETH), although BTC-based ETF applications were not approved.
In April 2021, the U.S. Senate approved Biden’s nomination of Gensler to head the SEC. Gensler initially spoke positively about blockchain and cryptocurrencies, promising to promote innovation if confirmed.
“Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion, but they’ve also raised new issues of investor protection. If confirmed at the SEC, I will work to promote innovation.” – Gary Gensler
U.S. Political Arena Developments
On July 21, Biden announced he was leaving the presidential race. This decision, preceded by a failed debate, coronavirus infection, and a rise in Trump’s popularity, led to market optimism among crypto enthusiasts. The Kamala Harris token (KAMA) saw a 43% price increase, and Trump-related tokens also rose significantly.
American States Criticize SEC Over Crypto Regulation
A coalition of seven U.S. states, led by Iowa Attorney Brenna Bird, criticized the SEC for exceeding its authority and stifling innovation. Bird stated that the SEC bypasses Congress and existing laws, giving itself new powers illegally.
“Just as the SEC cannot regulate trading baseball cards as securities, neither can the SEC regulate cryptocurrencies here.” – Brenna Bird, Iowa Attorney
Calls for Gensler to be Fired
In April 2023, Republican Warren Davidson announced he would introduce a bill requiring Gensler to resign. This was driven by a court’s verdict in favor of Grayscale on converting GBTC into an ETF, contrary to the SEC’s position. Additionally, Senator Tim Burchett proposed cutting Gensler’s salary to $1, citing the SEC as a financial burden on the government.
Gensler’s Future as SEC Head
Sarah Brennan, General Counsel for Delphi Ventures, believes the lack of clarity in U.S. cryptocurrency regulation today is due to Gensler’s politically driven approach.
“Gensler was driven purely by politics and thus failed at driving good policy outcomes to the detriment of all.” – Sarah Brennan
Gensler’s tenure has not met expectations. Initially supportive of cryptocurrencies, he is now remembered for initiating many lawsuits against blockchain companies. If Republicans win, Gensler’s likelihood of remaining in office seems even less likely.
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