Gary Gensler, We’re Gonna Miss You (Not)

In a departure from his usual reserved style, Gensler, reminiscent of Alan Greenspan at the Fed in the past, expressed his views candidly on Wednesday. He characterized himself as a cautious technocrat who is seldom spontaneous with answers. However, this time was different.

Essentially, Gensler is suggesting that a single national currency, controlled by a nation-state, tends to lead to stronger economies. Although this point may hold some merit, it’s surprising to hear such views from an SEC chair. He seems to be basing his perspective on historical precedents, rather than considering modern advancements like electricity or the internet, which were not part of our world in ancient times.

The statement made by Gensler implies that the majority of prominent figures in the crypto industry in 2024 are either imprisoned or awaiting extradition, which is not accurate. While it’s true that some individuals from the 2022 era have been involved in fraud and are now incarcerated, most recognized leaders within the industry today are free and actively contributing to its growth. For instance, Changpeng Zhao (CZ) is still active, Vitalik Buterin is working on his “World Computer,” and Brian Armstrong of Coinbase recently got married. This suggests that Gensler’s statement oversimplifies the current situation in the crypto industry, as there are many legitimate and influential figures who continue to shape its development.

Regarding the crucial questions about whether tokens are considered securities and if token issuances equate to investment contracts, Gensler provided little optimism that regulators would adjust laws to fit modern technological and market conditions or propose new ones. Instead, he emphasized that the Howey Test, established by the Supreme Court in 1940, remains relevant.

If you’re pondering whether a certain situation falls under the category of an investment contract, consider this: who is the one signing your law firm’s engagement letter? There’s a main business entity behind that signature. Who is it that knocks on the broker-dealer’s door asking them to facilitate trades for a specific asset? It seems illogical to assume there isn’t a shared interest at play in most cases, as Gensler pointed out.

Despite varied opinions within the cryptocurrency community, Gensler stands out as an exceptionally agreed-upon figure. Hopefully, his expanding statements suggest that he recognizes his tenure in office may soon conclude.

Please be aware that the opinions shared in this article belong solely to the writer and may not align with the perspectives of CoinDesk Inc., its proprietors, or associated entities.