Sources claim that President-elect Joe Biden has finally decided to appoint Gary Gensler, MIT blockchain professor and Obama’s CFTC chair, to head the Security and Exchange Commission (SEC) after he is sworn-in.
According to Reuters and CNBC’s anonymous sources, Gary Gensler will be Biden’s nominee as SEC Chair. His appointment, as a Bitcoin professional, is good news for the industry. The incoming chair is a well-known figure in the crypto industry, specifically in the academic sphere.
However, his appointment would likely prompt concern among Wall Street firms of stricter regulation.
Sources familiar with the matter told Reuters that the new chair could aim for “tougher regulations.” This is based on Gensler’s operations when he was chair of the Commodity Futures Trading Commission (CFTC) from 2009 to 2014. He implemented dramatic new swap trading rules mandated by Congress following the 2007-2009 financial crisis. It did not go down well with powerful Wall Street entities.
Good news for crypto?
Gensler’s nomination to head the SEC is seen as ushering in an era of greater federal oversight for the $1 trillion cryptocurrency market.
In the past, he advocated for a national way to register and monitor cryptocurrency exchanges instead of leaving oversight to the states. However, The SEC is likely to crack down further on Initial Coin Offerings, as the incoming chair believes that most of these digital tokens are unregistered securities.
Gensler has also advocated for greater regulation of cryptocurrency exchanges. “If it gets broad adoption, if we think the crypto world is going to be part of the future, it needs to come inside of public policy envelope,” Gensler said in a Bloomberg 2018 interview.
“That means we need to guard against illicit activity. And yes, we need to protect investors. The crypto exchanges, big exchanges like Coinbase, need to come within the SEC or the CFTC.”
Greater oversight could lead to greater mainstream adoption, he said.
A SEC chairman who understands and appreciates blockchain and cryptocurrencies’ potential would likely be a huge improvement over the recently departed SEC chairman Jay Clayton, who has been a staunch opponent of bitcoin exchange-traded funds, often citing rampant market manipulation.
Gensler appointment, what it means for Ripple
The SEC vs. Ripple saga under Gensler may take another nosedive that would serially affect the entire blockchain and crypto industry. Previous statements the former banker has made about the issue indicate how the cookie may crumble.
Reportedly, during a speech at an MIT conference in 2018, Gensler said there is a “strong case” for XRP being classified as a security. In fact, the Wall Street veteran claimed that Ripple “is doing a lot to advance the value of XRP.”
Gary Gensler deeply understands crypto & has strongly supported bitcoin for years. His selection as SEC chair signals a policy shift in favor of a bitcoin ETF.
He also went on record in 2018 saying there's "a strong case" that XRP is a security, signaling no shift on that issue.
— Jake Chervinsky (@jchervinsky) January 12, 2021
Apparently, Gensler would have taken similar actions against Ripple if he was in authority even before Jay Clayton. His speech back in 2018 signals that there is still no shift on SEC vs. Ripple saga.