After discussing all these points, let’s pause and evaluate Gensler’s impact on cryptocurrency from a broader perspective. Was it entirely his responsibility that the cryptocurrency sector lacked regulatory support? Or could he sometimes have been used as a scapegoat for issues persisting in financial regulation?

No legislation action

As a crypto investor, I’ve observed that regulation often lags behind legislation, and in Gary’s case, he was navigating this complex landscape with limited support from Congress. Over the past 16 years of bitcoin‘s existence, our lawmakers have yet to pass a single new law specifically addressing digital assets – is that entirely Gary’s fault? Absolutely not. While he could have advocated more vigorously for new laws and highlighted their importance (even collaborating with Warren), his role was not that of a sitting senator or representative.

Historic scandals

During Gary’s tenure, there were scandals that any SEC chair would have faced, such as the FTX $8 billion fraud case, which wasn’t his fault but was still within his remit to handle. It’s accurate to say that the SEC’s enforcement-focused approach felt like a harsh crackdown rather than a cleaning operation, but it was necessary to address the illegal activities that occurred during the last market boom. Many of the issues the SEC dealt with were either inherent in the situation or structural, challenges that anyone in his position would have had to tackle. Some of the enforcement actions taken by the SEC may also have beneficial effects on the crypto sector, boosting confidence among its critics.

Too many regulators

In most nations, a single entity governs both the stock and bond markets (securities) as well as the derivatives market, which includes futures and options on commodities. However, in the United States, there are two separate bodies: the Securities and Exchange Commission (SEC) for securities and the Commodity Futures Trading Commission (CFTC) for commodities. This distinction for cryptocurrencies has led to ambiguity and confusion since some are considered commodities (with bitcoin being the prime example), while others, almost all of them in fact, are viewed as something else by regulators. The SEC and CFTC have different approaches to regulation, with oversight by the SEC typically being more stringent.

While leading both the SEC and the CFTC in different years, Gensler has undoubtedly navigated through territorial conflicts. However, it’s important to note that the complex dual-regulator system isn’t primarily his creation.

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