The tussle between the crypto industry and regulatory agencies, especially in the US, has become frequent in the past months. The Securities and Exchange Commission (SEC) has been seen to ramp up enforcement actions against crypto companies. However, the SEC had to take a hit from some of the entities for which it is facing backlashes. This raises a question on the relevancy of current SEC chair Gary Gensler.
In his tenure started in 2021, Gary Gensler has been perhaps the most talked about SEC chair given multiple reasons. This is not limited to only the crypto industry but also in general. It was during his reign that the financial watchdog faced almost a loss in the legal battles against crypto entities.
Undoubtedly the U.S. regulator managed to make some of the companies such as Kraken and Bittrex pay fines worth $30 Million and $24 Million respectively in settlements. There were more instances where the agency managed to score a win over the companies.
But the trend saw a reversal in the past, especially in the wake of increased tightening of scrutiny over the crypto companies. It included even the giant players in the crypto industry including Binance and Coinbase.
Not all crypto companies are opting out for settlement nowadays, but agree to move ahead with the legal tussle.
In 2020, SEC charged payment protocol Ripple and its executives alleging to conduct sales of unregistered securities. The case gathered a lot of attention across the industry and slowly the crypto company got the lead against the regulator. Then, in July this year, the federal court reached a conclusion that the asset used for the sales by Ripple; XRP is not a security.
This was considered a huge win for Ripple against SEC, despite there is more to come to the case. It is a significant blow to the regulator since it raises the question if it fails to examine if an asset is a security or not.
There’s another issue of spot Bitcoin ETF aligned with the SEC which remained controversial. The agency has approved several futures Bitcoin ETFs but has yet to approve a spot investment vehicle.
The manager of the largest Bitcoin (BTC) fund Grayscale Bitcoin Trust (GBTC), Grayscale, filed with the SEC to convert its fund into an exchange traded fund (ETF). The regulator rejected the application after which the fund manager filed a lawsuit last year.
The case has recently seen its finale with the federal judge making comments on the inefficacy of the SEC to provide concrete reasons for not approving Grayscale’s ETF application.
In addition, when the U.S. SEC filed against Coinbase and Binance-like entities, these crypto industry giants retaliated and kept their stance firm.
These incidents raise concerns around the authority of SEC and on Gary Gensler too since he is the existing chairperson of the agency.
Given the five-year tenure for an SEC chair, Gary Gensler will stay in the position till 2026. However, the demand to fire him grew in the past with lawmakers such as Congressman Warren Davidson pushing out bills to eliminate Gensler from his position.
The decision of Gary Gensler will stay or not stay in the lap of time. One thing could be said with certainty that the time for the agency and the existing chairperson is not going easy.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/09/02/will-continuous-beatings-of-sec-lead-to-gary-genslers-elimination/