Unveiling Insights: Gary Gensler’s Stance on Cryptocurrency
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Gary Gensler’s Return: A New Perspective on Cryptocurrency
Gary Gensler, former chair of the U.S. Securities and Exchange Commission (SEC), recently broke his two-month silence with a notable appearance on CNBC’s Squawk Box. This marked his first public interview since stepping down from his role on January 20. During the 17-minute discussion with Andrew Ross Sorkin, Gensler expressed admiration for Bitcoin’s durability while drawing a sharp contrast with most non-Bitcoin tokens, which he likened to “sentiment-driven memes.”
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Shift in SEC’s Enforcement Approach
Under the current acting chair, Mark T. Uyeda, the SEC is moving away from the aggressive enforcement actions that were characteristic of Gensler’s tenure. While Gensler refrained from discussing specific cases, he emphasized the lack of fundamental value in the broader crypto industry.
Gensler’s Bitcoin Maximalism
Gensler remarked, “I’ll refrain from discussing individual cases but will reiterate this to your audience: The crypto market comprises a small fraction of the financial landscape. However, if you delve into this area, consider that financial assets typically hinge on fundamentals and sentiment. In this sector, it’s almost entirely sentiment-driven, with negligible fundamentals, especially outside of Bitcoin.”
He elaborated, “Bitcoin might endure due to its global intrigue, with billions showing interest. However, with ten- or fifteen-thousand other tokens driven solely by sentiment, the outcome is often unfavorable, leading most to decline.”
Bitcoin: A Precious Metal in the Crypto World
When co-host Joe Kernen queried if Bitcoin warranted different treatment, Gensler likened it to precious metals, a comparison he avoided during his SEC tenure. “Much like humans are drawn to a few precious metals such as gold, our fascination doesn’t extend to the multitude of meme or sentiment tokens,” Gensler noted.
SEC’s Strategic Withdrawal from Crypto Litigation
The interview coincided with the SEC’s notable retreat from litigation that Gensler had previously endorsed. On February 27, the SEC dismissed its civil action against Coinbase, concluding a prolonged dispute over the exchange’s alleged unregistered broker activities. Subsequent developments included the agency’s decision to drop its securities exchange complaint against Kraken, relieving the exchange from penalties and operational demands.
The most significant turn involved Ripple Labs. On March 19, CEO Brad Garlinghouse celebrated as the SEC announced its withdrawal from appealing last year’s mixed ruling on XRP sales. A joint motion filed on April 11 requested that the Second Circuit hold all appeals “in abeyance,” effectively closing a four-year legal battle that once threatened to define crypto assets’ security status in U.S. law.
Gensler’s Legacy and Bitcoin’s Resilience
Throughout his tenure, Gensler’s enforcement division pursued over 150 crypto-related cases, asserting that nearly all tokens, except Bitcoin, were unregistered securities. Even post-departure, Gensler’s rhetoric remained consistent, championing Bitcoin’s resilience while dismissing other tokens as speculative. This aligns with the Bitcoin-maximalist view that only the original cryptocurrency can serve as non-sovereign money.
At the time of writing, Bitcoin is trading at $84,178.
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