The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, announced his resignation on Thursday, throwing in the towel on efforts to rein in the digital asset industry.
After leading his agency’s offensive against many major players in the crypto industry, Gensler said on Thursday that he will resign on January 20, 2025, when Donald Trump begins his second term, following his recent election victory.
“The Securities and Exchange Commission is a remarkable agency,” Gensler said in a statement. “The staff and commission have a deep mission, focused on protecting investors, facilitating capital formation and ensuring markets work for both investors and issuers. The staff is made up of true public servants.”
“It has been a lifelong honor to serve with them on behalf of everyday Americans,” he continued, “and ensure that our capital markets remain the best in the world.”
Leading the charge in an industry crackdown following the collapse of FTX in 2022, Gensler earned a reputation for enforcing the law with actions many considered unjustified against many Cryptocurrency firms.
As a result, the Wall Street cop earned the title of the main antagonist of cryptocurrencies.
However, following Donald Trump’s victory in the White House, it was clear to Gensler that his time was running out as he constantly urged cryptocurrency firms to “register” with the regulator.
These same firms argued that US laws on digital assets were ambiguous, and it was unclear how or when they should interact with the regulator before listing or selling products to investors.
Regarding securities laws, Gensler maintained that the status quo was viable. But the president-elect vowed to replace him, promising to end Gensler’s “anti-crypto crusade.”
The SEC sued several major players under Gensler’s leadership, including major exchanges Binance and Coinbase. While putting large sectors of the industry on notice, it claimed that most tokens violated SEC rules. He said investors deserved the “time-tested protections” of securities laws as token prices fell alongside lawsuits.
However, the SEC chairman faced criticism from Twitter to Capitol Hill regarding the agency’s approach. While industry participants accused the regulator of trying to stifle innovation, others testified before Congress that loopholes in the SEC’s rules made compliance with cryptocurrencies effectively impossible.
With Gensler’s resignation, the president-elect is expected to appoint a relatively crypto-friendly successor. It could be either SEC Commissioner Mark Uyeda or Hester Pierce, who, in September, criticized an SEC enforcement action as “misguided and excessive” in a dissent notice.
Around the time Gensler was appointed to lead the SEC in 2021, industry participants were cautiously optimistic that he could establish “fair play rules.” As someone who taught a course on Blockchain at MIT, he demonstrated a solid understanding of how the technology works.
At times, Gensler faced accusations of stoking a regulatory “turf war” between the SEC and the U.S. Commodity Futures Trading Commission (CFTC). With the CFTC overseeing commodities like Bitcoin, Republican lawmakers said the SEC was using the lack of clarity to expand its reach.
Gensler’s reluctance to comment on Ethereum‘s regulatory status became a focal point for Republican lawmakers this year. After dodging questions, House Financial Services Committee Chairman Patrick McHenry (R-NC) accused Gensler of trying to mislead Congress.
A lawsuit filed by Ethereum software firm Consensys alleged that the SEC had launched an investigation into Ethereum, internally considering the asset an unregistered security. Consensys later said the regulator had dropped the investigation following the approval of Ethereum spot ETFs. (Disclosure: Consensys is one of 22 investors in an editorially independent Decrypt.)
The SEC focused on cryptocurrency exchanges and token issuers during Gensler’s tenure, but the agency’s enforcement scope expanded this year. As Election Day approached, the SEC warned companies involved in DeFi, NFTs, and gaming that the agency could soon sue.
Even though Gensler sparked fear and anger among some industry participants, he played a significant role in Bitcoin’s debut on Wall Street. When Bitcoin spot ETFs were approved this year, Gensler was one of three of five commissioners who voted in favor of them.
ETFs have played a key role in lifting the price of Bitcoin to all-time highs this year. But amid heaps of skepticism, Gensler’s green light might be remembered as a small part of his tenure.
Editor’s note: This story was updated with additional details after publication.
Edited by Andrew Hayward
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