Securities and Exchange Commission (SEC) Chair Gary Gensler announced his resignation Thursday, throwing in the towel on efforts to reign in the digital assets industry.
After leading the regulator's crypto crackdown against many major industry players, Gensler said Thursday that he will resign on January 20, 2025 as Donald Trump begins his second term, following his recent election win.
“The Securities and Exchange Commission is a remarkable agency,” said Gensler, in a statement. “The staff and the commission are deeply mission-driven, focused on protecting investors, facilitating capital formation, and ensuring that the markets work for investors and issuers alike. The staff comprises true public servants."
The SEC is a remarkable agency. The staff & the Commission are deeply mission-driven, focused on protecting investors, facilitating capital formation, & ensuring that the markets work for investors & issuers alike. The staff comprises true public servants.
— Gary Gensler (@GaryGensler) November 21, 2024
"It has been an honor of a lifetime 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 on an industry-wide crackdown following the collapse of FTX in 2022, the figurehead garnered a reputation for pursuing enforcement actions against many crypto firms.
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As a result, the Wall Street cop earned the label of chief crypto antagonist.
Following Donald Trump’s White House victory, though, the writing was on the wall for Gensler, who consistently called on crypto firms to “come in and register” with the regulator.
Those same firms argued that U.S. laws on digital assets are ambiguous, and it wasn’t clear how or when they should engage with the regulator before they listed or sold products to investors.
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As far as securities laws went, Gensler maintained that the status quo was workable. But the president-elect vowed to replace him, promising to end Gensler’s “anti-crypto crusade.”
The SEC sued several leading players under Gensler’s leadership, including major exchanges Binance and Coinbase. Putting large swaths of the industry on notice, he meanwhile claimed that a majority of tokens violated the SEC’s rules. Investors deserved the “time-tested protections” of securities laws, he said, as token prices dropped alongside lawsuits.
However, the SEC chair faced pushback from Twitter to Capitol Hill regarding the agency's approach. As industry participants accused the regulator of trying to stifle innovation, others testified to Congress that gaps in SEC rules made compliance with crypto effectively impossible.
With Gensler’s resignation, the president-elect is expected to appoint a relatively crypto-friendly successor. It may well be either SEC Commissioner Mark Uyeda or Hester Pierce, who, in September, skewered an SEC enforcement action as "misguided and overarching” a dissent notice.
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Around the time that Gensler was appointed to lead the SEC in 2021, industry participants were cautiously optimistic that he could create “rules of the road.” As someone who taught a course on blockchain at MIT, he displayed a robust understanding of how the technology works.
At times, Gensler faced accusations of stoking a regulatory “turf war” between the SEC and the Commodity Futures Trading Commission (CFTC). With the CFTC overseeing commodities like Bitcoin, Republican lawmakers said the SEC was using a lack of clarity to expand its reach.
Gensler’s reluctance to comment on the regulatory status of Ethereum became a focal point for Republican lawmakers this year. After sidestepping questions, House Financial Services Chair Patrick McHenry (R-NC) accused Gensler of trying to mislead Congress.
A lawsuit filed by the Ethereum software firm Consensys alleged that the SEC had launched an investigation into Ethereum, internally viewing the asset as an unregistered security. Consensys later said the regulator had dropped the investigation following the approval of spot Ethereum ETFs. (Disclosure: Consensys is one of 22 investors in an editorially independent Decrypt.)
The SEC targeted crypto exchanges and token issuers during Gensler’s tenure, but the agency’s enforcement scope broadened 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 provoked fear and anger among some industry participants, he played a significant role in ushering in Bitcoin’s Wall Street debut. When spot Bitcoin ETFs were approved this year, Gensler was among three of five commissioners that voted in favor of them.
The ETFs have played a key role in lifting Bitcoin’s price to all-time highs this year. But amid heaps of skepticism, Gensler’s green light may 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
