The time has arrived for Gary Gensler to leave the U.S. Securities and Exchange Commission. This hopefully will mark the new beginnings for the crypto world. Last four years with Gensler in charge of SEC have not been the best for crypto. "D" is the grade I would give for Gensler performance during his time at SEC. The only reason I am not going with "F" is because, while Gensler overall actions towards crypto were hostile, he has maintained a view of bitcoin not being a security. "D" in this case also stands for a big disappointment. When Gensler was appointed for this position, there was hope. The hope was Gensler would utilize his extensive knowledge in bitcoin and crypto to make things better, to bring clarity regarding the regulation matters in crypto. Unfortunately, this didn't happen. What we saw was the complete opposite.
Gary Gensler wasn't new to bitcoin and crypto as technology and financial instruments. He had taught a class titled Blockchain And Money at MIT. It is a very interesting and educational class. I would recommend watching it. There was some enthusiasm when Gensler was appointed as SEC chair, because of his knowledge regarding blockchains, bitcoin, and crypto. "There is no way someone who fully understands these technologies and innovation would do anything to hurt them" - was my thinking too. I hoped this kind of expertise is what was needed in the government, especially in SEC to make educated decisions, implement creative solutions to foster and grow the industry. However, it seems like when it comes to such government agencies politics and political agenda take priority over doing what they were created to do.
Over last few years was have seen SEC taking one hostile action after another against crypto, exchanges, and businesses. Instead of building the industry, connecting and networking, SEC made it difficult for exchanges to operate in the US and elsewhere. Exchanges are important in crypto. Of course crypto does offer financial tools to transfer value without relying on exchanges. But there is also a need for bridges to the traditional finance. Exchanges did play an important roles in crypto adoption as well. One of the first exchanges I have used and liked was Bittrex. It was easy to use. It was secure. It allowed discovering new coins and trading. I had fun trading on Bittrex. Because of the hostile actions SEC took, Bittrex decided to shut down. Because they didn't want to deal with uncertainty and didn't want to face legal issues with SEC. Most importantly SEC under Gensler's leadership failed in delivering proper guidelines to exchanges to improve their business practices and be in compliance with the laws. SEC would arbitrarily choose some wrongdoings to hurt the exchanges.
Coinbase was among the exchanges that SEC had issues as well. However, Coinbase was strong enough to fight back. Not only they fought back the allegations, they took SEC to the courts demanding clarifications on what SEC is expecting from exchanges to comply with the law. All this time SEC has been very vague. Even in Congressional hearing Gensler would fail to answer to simple questions like, "Is Ethereum a security or commodity?" He wouldn't say no. He wouldn't say yes. His answer would be repeating the talking points that made zero sense. Something along the lines of, "There are existing laws that already define where certain crypto assets falls as financial instruments". What laws? How are they implements? would find no answers. It was definitely frustrating to see this kind of behavior by SEC and Gensler.
SEC under Gensler leadership failed to actually fight fraud and scams. One of the biggest failures was their incompetence to prevent SBF and FTX from defrauding their customers. They only got involved after the fact with other agencies. After everybody lost their money, after exchange collapsed, SEC and other agencies were ready to intervene. Now if they did the job what they were claiming to be doing, such frauds and scams wouldn't happen. This wasn't too complicated either. Only a little bit of effort would have discovered the potential risks and prevent the theft of customer assets. This would help exchanges that do things correctly and abide by the law to grow as well, which would result in secure platforms for crypto people.
We have seen Terra Luna fiasco during Gensler's tenure. We have seen crypto lending platforms going bankrupt and also losing customer funds during this time. There were many things that SEC could have done to prevent these unfortunate events. We know many other fraud and scams that happened in crypto under Gensler's watch that never even was brought to justice or even investigated. Gensler may claim his intentions were to protect the consumers and prevent fraudulent activities all he wants. In my view, this didn't happen at all. Anything they have done was to slow the growth and developments in crypto. These actions by SEC are also tied to the political actions of slowing down bitcoin and creating obstacles for crypto innovations. We all have heard about about operations Choke Point 2.0. It looks like there were a collective efforts by the government to make crypto and bitcoin undesirable as investment tools, career opportunities, and potentials for development and innovations.
Despite all the hostile actions by SEC, bitcoin and crypto has shown the resilience of decentralized systems. It was clear that agencies like SEC can only slow things down, but wouldn't be able to stop the progress completely. Growth and innovation in bitcoin and crypto would continue despite what SEC and Gensler would do. But their action definitely didn't help. Not only SEC failed as an organization that regulates securities, they have also shown the hypocrisy the is present in the government, its departments, and its agencies. SEC brought many legal cases against crypto exchanges and businesses. There were several cases they had lost. Even one of the recent legal battles that Coinbase brought against SEC has shown that SEC had no intentions of clarifying the rules and explaining the laws. The judge preside over this case, made a statement that SEC indeed hadn't properly explained and clarified rules, laws, and guidelines regarding bitcoin and crypto. SEC didn't even pretend to do something useful for all.
With Gensler gone, the anticipation is that new administration will appointed a crypto friendly SEC chair, and guidelines will be created to make things simpler and understandable by many. Crypto and bitcoin don't really need assistance by SEC. Bitcoin and crypto will do well in a short and long term. As many crypto enthusiasts say, *just keep the government away from these innovations." That too didn't happen.
With Gensler gone, and new administration coming, there are discussions on the internet about how a crypto friendly leadership would look like and what they will to the table. They don't bring much to the table and discussions, so that there are clear understandings. In general, it is much better if governments just stay away from crypto and bitcoin. Majority's idea is governments just should stay away, and let the free market in crypto and bitcoin lead the way. Crypto friendly appointments for SEC and other agencies is obviously good. That doesn't fully solve the problem.
With or without crypto friendly leadership, I am hopeful there will be more clarity introduced in the near future. I hope governments will take closer look at what is happening in crypto world and assist with implementing reasonable solutions. We already know that the new administration is crypto friendly and hopes are we will see a lot of crypto friendly actions and executives in charge. What we really need is the clarity regarding the guidelines to be followed by exchanges, businesses and individuals. Clarity of the vision and guidelines is what is truly needed.
Crypto is entering a new era where there is a lot of hope for the upside, excitement for brighter future, and opportunities for growth. Inauguration day is approaching and markets are already speculating and finding out the efficiencies within the networks. There is a lot of positives to anticipate and there i a lot of excitement. Let the new era in crypto world begin and bring prosperity for all.
