Gary Gensler

Gensler hints Grayscale ruling forced SEC to take ‘new look’ at Bitcoin ETFs

The SEC chair could be softening his stance on Bitcoin ETFs following the Grayscale court victory, but if so, he hasn’t admitted it outright.

United States Securities and Exchange Commission (SEC) chair Gary Gensler has hinted that the regulator has been rethinking its approach to spot Bitcoin (BTC) exchange-traded products following a recent Grayscale court decision.

Speaking to CNBC on Dec. 14, Gensler was questioned about the long list of pending spot Bitcoin exchange-traded fund (ETF) applications. He said the SEC has “between eight and a dozen filings” going through the process at the moment.

“We had in the past denied a number of these applications,” he said before adding that the courts have weighed in on that. What followed was a statement suggesting that the agency could be changing its tack on Bitcoin:

Read more

SEC’s ‘brute force’ crypto regulation attempt is ‘bad policy’ — Paradigm

The venture capital firm pointed out the fundamental differences between crypto assets and securities.

Criticisms of the United States Securities and Exchange Commission are mounting as the agency remains unrelenting in its war on crypto.

On April 21, Web3 venture capital firm Paradigm published a policy piece on the problems with SEC registration.

It claimed that SEC Chair Gary Gensler’s “attempt to brute force crypto assets that may not even constitute ‘securities’ into an ill-fitting disclosure framework is bad policy.”

The firm, which invests hundreds of millions into crypto and Web3 startups, said thythe SEC fails to provide crypto asset users and investors with the information they need.

It also denied the SEC’s claims it offers crypto entrepreneurs a viable path to compliance.

Paradigm points out the current disclosure policy was developed in the 1930s, long before the internet. It claims current policies are “tailor-made for centralized companies issuing securities” and that crypto markets are fundamentally different.

The firm noted that securities provide the holder legal rights against a centralized entity, however, there are no “legal rights” with most cryptocurrencies but “technological abilities in a protocol.”

Additionally, crypto assets can be completely independent of their issuer and maintain full functionality without their input.

Crypto assets can also be traded peer-to-peer and on a fundamentally different technology stack, unlike traditional securities and stocks, which trade on an “archaic system full of intermediaries.”

The venture firm concluded that the financial regulator needs to modify its current disclosure regime to incorporate new technologies and asset classes.

“Unsurprisingly, without major changes to the SEC’s current disclosure regime, the SEC is unable to effectively regulate crypto asset markets.”

Paradigm is not the only crypto industry representative that has been critical of the SEC and its policies.

Related: Gary Gensler’s SEC is playing a game, but not the one you think

Congressman Warren Davidson has also been vocal about the agency and its chief “cop on the beat.”

On April 16, the pro-crypto politician introduced legislation “to correct a long series of abuses” aiming at replacing Gensler with an executive director that reports to the board.

In an April 18 hearing on oversight of the SEC, Gensler was grilled by the chair of the House Financial Services Committee, Patrick McHenry. “Clearly, an asset cannot be both a commodity and a security,” said McHenry as Gensler refused to say what he considers the classification of Ether (ETH).

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

Video of SEC chair praising Algorand resurfaces after recently deeming it a security

Members of the crypto community have called out the SEC Chairman for “shilling” Algorand.

A four-year-old video of United States Securities and Exchange Commission Chair Gary Genser giving praise to smart contract platform Algorand (ALGO) is circulating on Twitter following the SEC declaring that ALGO is an unregistered security.

In the video, Gensler referred to Algorand as a “great technology” while he was contemplating whether a “high performance” smart contract network would be capable of integrating an Uber or Lyft-like application on its platform.

Foundation’sALGO is one of six tokens that Gensler claimed was an unregistered security in the SEC’s lawsuit against crypto trading platform Bittrex on April 17 that took issue with the Algorand Foundation’s initial coin offering (ICO) of ALGO in June 2019.

Cryptocurrency researcher Mason Versluis was one of the first to highlight the video in an April 17 tweet criticizing Gensler for “shilling” ALGO, with others calling out the SEC chair for his apparent hypocrisy.

Gensler’s praise of Algorand was heard by an audience at a Massachusetts Institute of Technology () “Fintech Beyond Crisis” conference held on April 25, 2019.

Gensler worked as a professor of global economics and management at MIT prior to becoming the SEC’s chair, and he acknowledged former MIT colleague and Algorand founder Silvio Micali in the speech — who appeared to be in the crowd.

The video sparked Cinneamhain Ventures partner Adam Cochran to question the long-standing advice from Gensler for crypto firms to register with the regulator.

“Surely if there is a path to register, a world renown MIT professor who personally knows the Chairman of the SEC can figure it out,” Cochran tweeted on April 17.

Fox Business reporter Eleanor Terrett expects Gensler to be questioned over his Algorand comments in his upcoming testimony before the U.S. House Committee on Financial Services on April 18.

Other critics choose to mock the situation at hand, highlighting the price decline of ALGO, which has seen a 93.8% decline since its launch, according to CoinGecko data.

It should be noted that ALGO didn’t hit the market until late June 2019, two months after Gensler’s speech.

Related: Coinbase and Algorand give divergent reasons for staking reward suspension

Gensler stated in an April 17 tweet that it had been an “honor” to work at the SEC over the last two years and chose to highlight the 1,500 enforcement actions the regulator has undertaken since he’s been at the helm.

Gensler was sworn into office as SEC chair on April 17, 2021, after U.S. President Joe Biden’s nomination of Gensler was confirmed by the Senate on April 14, 2021.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Rep. Davidson to introduce legislation to fire SEC boss Gensler for crypto overreach

A U.S. congressman has declared he will introduce legislation to have SEC boss Gary Gensler removed from his role.

Securities and Exchange Commission (SEC) chair Gary Gensler could be facing unemployment after United States Representative Warren Davidson declared he would introduce legislation to fire the SEC boss.

In an April 15 tweet responding to Coinbase’s legal chief, Paul Grewal, the crypto-friendly congressman announced his intention to have Gensler removed from his role after the SEC’s latest announcement about revisiting the proposed redefinition of an “exchange.”

“To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board (where authority resides),” Davidson tweeted.

“Former Chairs of the SEC are ineligible,” he added.

Gensler said in an April 14 meeting the proposed rule amendments could benefit investors and markets by bringing certain brokers under additional regulatory scrutiny as well as “modernizing” rules that define an exchange.

Similar amendments were proposed in January 2022. At the time, crypto advocacy groups suggested it was an overreach of the SEC’s authority that could jeopardize participation in the space.

SEC commissioner Hester Peirce — known as “Crypto Mom” for her pro-crypto positions — criticized the new proposed rule amendments in an April 14 statement, declaring “stagnation, centralization, expatriation, and extinction are the watchwords” of the latest move by the SEC.

“Rather than embracing the promise of new technology as we have done in the past, here we propose to embrace stagnation, force centralization, urge expatriation, and welcome extinction of new technology,” Peirce said.

“Accordingly, I dissent,” she added.

According to Peirce, unlike in the past when the SEC embraced new technology, the modern regulator has been expanding its reach to solve problems “that do not exist.”

She further opined the SEC has taken the approach of refusing to alter current regulations to allow room for new technologies and new ways of doing business.

“Today’s Commission tells entrepreneurs trying to do new things in our markets to come in and register,” Peirce said.

“When entrepreneurs find they cannot, the Commission dismisses the possibility of making practical adjustments to our registration framework to help entrepreneurs register, and instead rewards their good faith with an enforcement action.”

Peirce also accused the SEC of using the “notice-and-comment rulemaking process” as a threat.

Related: SEC to up scrutiny of firms offering or giving advice about crypto

According to Peirce, because of the concerns over the ambiguity and scope of the new proposed rule changes and the SEC’s “limited understanding” of the space, a concept release should have been issued instead.

“I wish we had proceeded differently,” Peirce said.

Over the last few years, the SEC has launched more than a few high-profile actions against crypto companies such as Ripple, LBRY and Coinbase over alleged violations.

It has also taken aim at staking and stablecoins, prompting some critics to argue the SEC has been using enforcement actions to develop the law on a case-by-case basis rather than creating clear regulations.

Magazine: Crypto Wendy on trashing the SEC, sexism, and how underdogs can win

Congressman Tom Emmer says SEC chair Gary Gensler is a ‘bad faith regulator’

The crypto-friendly congressman questioned Gary Gensler’s supposed ‘open door policy” suggesting that he “might have an open door, but it is an enter-at-your-own-risk-door.”

Crypto-friendly Congressman Tom Emmer has slammed U.S. Securities and Exchange Commission (SEC) chair Gary Gensler for his approach to cryptocurrency regulation, labeling him as a “bad faith regulator.”

During an April 7 appearance on the Unchained podcast hosted by author and crypto journalist Laura Shin, Emmer didn’t mince his words as he questioned Gensler’s oversight on the crypto sector:

“This guy in my mind, is a bad-faith regulator. He’s been blindly spraying the crypto community with enforcement actions while completely missing the truly bad actors.”

Emmer pointed to the example of Coinbase, which before being slapped with a Wells Notice by the SEC in March, was actively trying to work with the agency by getting compliance feedback on staking products, among other things.

“Gary Gensler might have an open door, but it is an enter-at-your-own-risk door, because what he does is, despite several meetings over several months, Gary Gensler’s SEC refused to provide feedback,” he said, adding that:

“And instead, after all these meetings and nothing happening, the SEC slapped Coinbase with a Wells Notice regarding the very issues on which Coinbase was asking for their feedback.”

Since Gensler took over the helm of the SEC back in April 2021, he has repeatedly suggested that the agency has an amicable ‘open door policy’ and called on crypto firms to register with the SEC to maintain compliance with securities law.

This is mostly down to his view that nearly all crypto assets apart from Bitcoin (BTC) are classified as securities, and thus the sector should be primarily regulated by the SEC.

Related: US lawmaker accuses FDIC of using banking instability to attack crypto

Despite this, Coinbase CEO Brian Armstrong has highlighted the difficulty of dealing with the SEC on several occasions, while other figures such as Kraken CEO Jesse Powell have echoed similar sentiments.

A major issue raised by many in the crypto community is the apparent anti-crypto-focused ‘regulation by enforcement’ approach stemming from the SEC and broader U.S. government.

Commenting on such, Emmer ultimately stated:

“This is clearly not the way the government should be serving Americans, and that it sends a clear message, I believe, to the broader crypto community, and that directly is ‘Gary Gensler is not regulating in good faith’.”


Congressman Tom Emmer says SEC chair Gary Gensler is a ‘bad faith regulator’

The crypto-friendly congressman questioned Gary Gensler’s supposed “open door policy,” suggesting that he “might have an open door, but it is an enter-at-your-own-risk-door.”

Crypto-friendly Congressman Tom Emmer has slammed United States Securities and Exchange Commission (SEC) chair Gary Gensler for his approach to cryptocurrency regulation, labeling him a “bad faith regulator.”

During an April 7 appearance on the Unchained podcast hosted by author and crypto journalist Laura Shin, Emmer didn’t mince his words as he questioned Gensler’s oversight on the crypto sector:

“This guy in my mind, is a bad-faith regulator. He’s been blindly spraying the crypto community with enforcement actions while completely missing the truly bad actors.”

Emmer pointed to the example of Coinbase, which before being slapped with a Wells notice by the SEC in March, was actively trying to work with the agency by getting compliance feedback on staking products, among other things.

“Gary Gensler might have an open door, but it is an enter-at-your-own-risk door because what he does is, despite several meetings over several months, Gary Gensler’s SEC refused to provide feedback,” he said, adding that:

“And instead, after all these meetings and nothing happening, the SEC slapped Coinbase with a Wells Notice regarding the very issues on which Coinbase was asking for their feedback.”

Since Gensler took over the helm of the SEC in April 2021, he has repeatedly suggested that the agency has an amicable “open door policy” and called on crypto firms to register with the SEC to maintain compliance with securities law.

This is primarily due to his view that nearly all crypto assets apart from Bitcoin (BTC) are classified as securities. Thus the sector should be principally regulated by the SEC.

Related: US lawmaker accuses FDIC of using banking instability to attack crypto

Despite this, Coinbase CEO Brian Armstrong has highlighted the difficulty of dealing with the SEC several times. Other figures, such as former Kraken CEO Jesse Powell, have echoed similar sentiments.

A major issue raised by many in the crypto community is the apparent anti-crypto-focused “regulation by enforcement” approach stemming from the SEC and the U.S. government.

Commenting on such, Emmer stated:

“This is clearly not the way the government should be serving Americans, and that it sends a clear message, I believe, to the broader crypto community, and that directly is ‘Gary Gensler is not regulating in good faith.’”


SEC’s Gensler seeks $2.4B in funding to chase down crypto ‘misconduct’

United States Securities and Exchange Commission Chair Gary Gensler says the regulator is spread thin and needs additional funding to keep up with the “increased complexity in the capital markets.”

United States Securities and Exchange Commission Chair Gary Gensler has thrown his support behind U.S. President Joe Biden’s request to allocate a record $2.4 billion in funding for the regulator, highlighting the ongoing need to crack down on “misconduct” in the cryptocurrency industry.

In prepared testimony for the March 29 budget hearing with the House Appropriations Committee, Gensler said the additional funding was needed to keep up the pace of innovation, adding:

“Rapid technological innovation in the financial markets has led to misconduct in emerging and new areas, not least in the crypto space. Addressing this requires new tools, expertise, and resources.”

The additional funding would allow the SEC to hire 170 additional staff, most of whom would work within its enforcement and examination divisions, said Gensler.

Related: Beaxy exchange shutters after SEC presses multiple charges against founder, execs

The SEC chair said that the prior year’s budget increase allowed it to bring staffing levels above what it was in 2016 for the first time, but said the regulatory agency was still stretched thin, adding:

“As the cop on the beat, we must be able to meet the match of bad actors. Thus, it makes sense for the SEC to grow along with the expansion and increased complexity in the capital markets.”

Gensler again described crypto as the wild west, suggesting the nascent industry is “rife with noncompliance,” and that crypto investors were putting their “hard-earned assets at risk in a highly speculative asset class.”

According to Gensler, the regulator “received more than 35,000 separate tips, complaints, and referrals from whistleblowers and others in FY 2022,” which helped it bring more than 750 enforcement actions and “resulted in orders for $6.4 billion in penalties and disgorgement.”

Thirty of these actions were related to the crypto industry, which resulted in $242 million in monetary penalties and represents a 36% increase over the 22 actions announced in 2021.

Web3 Gamer: Shrapnel wows at GDC, Undead Blocks hot take, Second Trip

Intern for Gensler? SEC’s college traineeships start at $15 an hour

The SEC is recruiting for college traineeships starting at $15.09 an hour, which is less than the minimum wage in Washington D.C., where the regulator is headquartered.

College students wishing to intern for the United States Securities and Exchange Commission (SEC) are in luck — the regulator has opened applications for its Scholars Program for Fall 2023.

The SEC is looking for “student trainees” for its business and legal programs, with the business program paying between $15.09 and $28.83 per hour for the traineeship at its Washington D.C. headquarters.

The lowest range of the rate posted for the business program is lower than the current Washington D.C. minimum wage of $16.10.

Typically, however, most firms in the U.S. are not legally obligated to pay interns if the employment relationship satisfies the “primary beneficiary test” set out in the Fair Labor Standards Act.

The SEC’s legal program also pays more generously, with rates for both its regional and Washington D.C. office advertised between $23.47 and $35.27 per hour.

The programs target currently enrolled undergraduate and graduate students to participate in 10-week internships beginning on Aug. 28 and ending on Nov. 3.

Both programs are open in other U.S. states for the regulator’s regional offices in locations such as California, Colorado, Florida and Georgia, according to the job postings.

Application details for the Student Trainee position as part of the business program. Source: USAJOBS

As part of the application, those interested are required to select the lowest pay grade they’re willing to accept for the position.

Related: Crypto developers should work with the SEC to find common ground

The posting said the SEC is looking for those who study blockchain, distributed ledger technology, computer science or cybersecurity — among a host of other fields of study.

In May last year, the SEC expanded its cyber unit by nearly 50%. The unit comprises “crypto assets” and “cyber” subdivisions, which overlook the sectors and assist in deciding where to pursue enforcement actions.

Those interested in the traineeship have until April 3 to submit their application.

Signature Bank investigated for money laundering prior to demise: Report

The pro-crypto bank was reportedly under dual investigations to uncover if it was taking proactive measures to stop money laundering.

The cryptocurrency-friendly Signature Bank was reportedly being investigated by two United States government bodies prior to its collapse.

According to a March 15 Bloomberg report citing people familiar with the matter, investigators with the Justice Department were examining whether Signature took adequate measures to detect potential money laundering by its clients.

It was noted the regulator was particularly concerned as to whether the bank was taking preemptive measures to monitor transactions for “signs of criminality” and properly vetting account holders.

A separate probe by the Securities and Exchange Commission was also “taking a look” at the bank, according to two anonymous sources quoted by Bloomberg. Details regarding the nature of the SEC’s probe were not reported.

It’s unclear when the investigations began and what effect, if any, they had on the recent decision by New York state regulators to close the bank.

It’s reported Signature and its staff are not accused of wrongdoing and the investigations may be finalized without any charges or further action taken by the SEC or the Department of Justice (DOJ).

The report comes after a March 14 class action lawsuit by Signature shareholders filed against the bank and former executives for claiming to be “financially strong,” only three days before it was forcibly shuttered.

Barney Frank, a former board member of Signature Bank, said on March 13 the regulators wanted “to send a very strong anti-crypto message.”

Frank added the crypto-friendly bank became the “poster boy,” as there was “no insolvency based on the fundamentals.”

Related: Gemini says no funds at Signature Bank backing GUSD

Signature, which was closed on March 12, was part of a series of bank closures that also included Silvergate Capital and Silicon Valley Bank (SVB).

The DOJ and the SEC have reportedly since initiated separate investigations into the collapse of Silvergate Capital and SVB.

It’s reported the regulators will examine the events leading up to the bank’s collapse, including scrutinizing security filings that disclosed the sale of SVB shares by the firm’s CEO Greg Becker and CFO Daniel Beck that took place two weeks prior to its downfall.

The SEC has not formally commented on the matters, but SEC chair Gary Gensler said on March 12 that it “will investigate and bring enforcement actions if we find violations of the federal securities laws.”

Biden vows to hold accountable those responsible for SVB, Signature collapse

United States President Joe Biden said on Twitter that he is “firmly committed” to holding those responsible for the Silicon Valley Bank and Signature Bank collapse “fully accountable.”

The president of the United States, Joe Biden, has vowed to hold those responsible for the failure of Silicon Valley Bank and Signature Bank while assuring Americans that their deposits are safe. 

On March 12, the New York District of Financial Services took possession of Signature Bank. The Federal Reserve said that the crypto-friendly bank was closed to protect the U.S. economy and strengthen public confidence in the banking system. 

The Fed also announced a $25 million fund aimed at backstopping certain banks that could face liquidity issues in the future. 

Biden tweeted to his 29.9 million followers on March 13 that he’s pleased that the agencies have “reached a solution that protects workers, small businesses, taxpayers and our financial system.”

The president added he was also “firmly committed” to holding those responsible for the mess “fully accountable.” He added that he would “have more to say” in an address on Monday, March 13. 

Meanwhile, a host of other United States politicians have also shared praise over the recent federal regulator actions aimed at stemming contagion from the recent banking collapses. 

U.S. Senator Sherrod Brown and Representative Maxine Waters said they were also pleased to see that both insured and uninsured SVB depositors would be covered, according to March 12 statement by the U.S. Senate Banking and Housing Committee:

“Today’s actions will enable workers to receive their paychecks and for small businesses to survive, while providing depository institutions with more liquidity options to weather the storm.”

“As we work to better understand all of the factors that contributed to the events of the last several days and how to strengthen guardrails for the largest banks, we urge financial regulators to ensure the banking system remains stable, strong, and resilient, and depositors’ money is safe,” the statement added.

Meanwhile, U.S. Securities Exchange Commission Chairman Gary Gensler has used the moment to double down on his agency’s pursuit of wrongdoers, without naming any industries in particular.

The chairman reinforced that the SEC would be on the lookout for violators of U.S. securities laws in a March 12 statement:

“In times of increased volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly.”

“Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws,” the SEC chairman added.

The shuttering of SVB temporarily triggered the depegging of Circle’s USD Coin (USDC) to as low as $0.88 on March 11, as $3.3 billion of Circle’s $40 billion USDC reserves are held by SVB.

However, USDC is nearly back at $1 after the Federal Reserve confirmed that all customer deposits at Signature Bank and SVB would be made in “whole.”

Related: US Fed announces $25B in funding to backstop banks

Another prominent crypto-bank, Silvergate Bank, announced last week that it would shut down and voluntarily liquidate “in light of recent industry and regulatory developments.”

Shortly after, Gensler wrote a March 9 opinion piece for The Hill that threatened U.S. crypto companies to “do their work within the bounds of the law” or be met with enforcement action.