In his final days as SEC Chairman, Gary Gensler maintained his tough stance on cryptocurrency regulation while making a notable exception for Bitcoin. During a recent CNBC Squawk Box interview, Gensler delivered parting shots at the crypto industry while defending his legacy of aggressive enforcement.
"The crypto field remains highly speculative and largely non-compliant with U.S. laws," Gensler stated, pointing to issues around anti-money laundering, sanctions, and securities regulations. However, he specifically carved out Bitcoin from his criticism, noting that unlike thousands of other tokens, Bitcoin has been established as not meeting the definition of an investment contract under the Howey Test.
The outgoing chair's remarks drew sharp rebuke from crypto industry leaders. Ripple CEO Brad Garlinghouse accused Gensler of being "completely dismissive of the 2024 election and the American public" while pursuing a "failed regulation-by-enforcement agenda to the bitter end."
The criticism comes amid ongoing legal battles, including the SEC's case against Ripple. Stuart Alderoty, Ripple's Chief Legal Officer, called the SEC's refusal to postpone a court brief submission "a waste of time and taxpayer dollars."
Gensler defended his approach, stating he "believes deeply in democracy" while acknowledging the crypto industry's growing political influence through campaign contributions. He emphasized that his actions were focused on protecting investors, noting that an estimated 10,000 to 15,000 crypto tokens currently operate without proper regulatory compliance.
The SEC chairman's tenure ends January 20, coinciding with the presidential transition. Paul Atkins is slated to succeed Gensler, pending Congressional confirmation. The leadership change may signal a shift in the SEC's approach to crypto regulation, though the fundamental regulatory challenges facing the industry are likely to persist.