SEC Chair Gary Gensler on Crypto: ‘It’s Unlikely This Stuff Is Gonna Be a Currency’
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For the last three years, crypto firms’ prime nemesis has been Securities and Exchange Commission chair Gary Gensler, who they accuse of pursuing an unfair vendetta against the industry. In response, the industry has spent huge sums on the 2024 election in a bid to replace Gensler.
The next SEC chair is expected to push forward new regulations that will modify existing securities laws or enable digital asset companies to become compliant with rules that Gensler has long admonished them for flouting. That will also serve to rein in enforcement.
Bipartisan crypto legislation that supports that goal is now a stronger prospect with the Senate now in solid Republican control.
“We expect that both the Trump administration’s and new Congress’ approach to crypto regulation to be much more constructive,” said Jack Inglis, chief executive officer of the Alternative Investment Management Association, a London-based trade group representing hedge funds and private equity firms.
That means policies “recognising the need to embed crypto in the broader financial services framework while taking account of the technological differences with traditional finance leading to a more bespoke approach in many areas,” he said.
The SEC’s enforcement cases against crypto companies have centred on whether their products fit within the decades-old definition of a security, as laid out in the US Supreme Court’s opinion SEC v. W.J. Howey Co. That has not been a good approach, according to William McLucas, a former SEC enforcement director, now a partner at WilmerHale. McLucas spoke during a securities enforcement conference in Washington on Wednesday.
“That can’t be the solution because whether you like crypto or you don’t like crypto, it’s not going away,” McLucas said. “The enforcement cases that have been brought are what they are, but they keep bringing them, and we keep seeing crypto products,” he said.