As SEC Chair Gensler Prepares to Leave, the Crypto World Continues to Push Back Against His Legacy
With just days left in office, SEC Chair Gary Gensler made it clear that he doesn’t believe crypto money played a pivotal role in the outcome of the 2024 U.S. presidential election. In a candid interview, Gensler downplayed the influence of cryptocurrency interest groups in swaying voters or funding candidates, including President-elect Donald Trump. But while Gensler may be ready to exit stage left, his legacy of regulatory battles with the crypto industry is far from over.
Crypto Money and the Election: Gensler’s Take
In a January 14 interview on CNBC’s Squawk Box, Gary Gensler gave his final thoughts on the 2024 U.S. presidential race and the crypto industry’s involvement. Gensler, who is set to step down from his role as head of the SEC the same day Donald Trump is inaugurated, addressed the elephant in the room: did the crypto sector play a decisive role in the election? According to Gensler, the answer is a resounding “no.”
While acknowledging that cryptocurrency-related groups did contribute money to various political action committees (PACs), Gensler insisted that the election wasn’t driven by crypto interests. “This election, though as you point out, there was money raised from the crypto field, I don’t think that’s what this election was about,” Gensler remarked. Instead, he pivoted to his longstanding position on digital assets, stressing that crypto remains a “highly speculative field” with multiple compliance issues. According to Gensler, crypto firms have fallen short of adhering to key U.S. laws—ranging from anti-money laundering regulations to sanctions compliance and, crucially, securities laws.
Gensler’s Legacy: The Battle Over Crypto Regulations
Gary Gensler’s tenure as SEC chair has been marked by intense scrutiny of the cryptocurrency industry. Under his leadership, the SEC has brought a series of high-profile enforcement actions against major players in the crypto world, including Coinbase, Ripple Labs, and Binance. While Gensler argues that these actions are necessary to protect investors, critics from the digital asset community claim that his approach has been overly aggressive and lacking in clear guidelines.
The crypto industry has long called for clearer rules of the road, but under Gensler, they’ve received more questions than answers. In fact, many believe the lack of regulatory clarity has left firms in a state of limbo, uncertain of what constitutes a violation of securities laws. For many in the crypto space, this ambiguity has fueled frustration and confusion, leading some to question whether Gensler’s leadership is more about enforcement than establishing a fair regulatory framework.
Crypto PACs: Where the Money Went
Despite Gensler’s dismissal of the idea that crypto money significantly influenced the 2024 election, the industry’s political involvement cannot be entirely ignored. One notable example is the PAC Fairshake, which raised millions of dollars to support “pro-crypto” candidates in U.S. congressional races. However, records from the Federal Election Commission (FEC) show that Fairshake did not make any direct contributions to Trump’s campaign.
In a December 2023 interview on 60 Minutes, Ripple CEO Brad Garlinghouse suggested that Fairshake might not even exist if Gensler hadn’t been at the helm of the SEC. The organization, which spent big on media campaigns to back pro-crypto candidates, was a direct response to the regulatory environment under Gensler’s leadership. Garlinghouse’s comments reflect a sentiment shared by many in the crypto world—that Gensler’s tough stance on crypto has pushed the industry to take more aggressive political action.
Trump’s Pick: Paul Atkins for SEC Chair
As Gensler prepares to step down, attention is turning to his potential successor. President-elect Trump announced in December that he plans to nominate former SEC commissioner Paul Atkins to replace Gensler. Atkins, a former Republican SEC commissioner, is seen as a more crypto-friendly choice, which could signal a shift in how the agency approaches digital assets. However, as of the publication of this article, the U.S. Senate has not yet scheduled a hearing to confirm Atkins.
The change in leadership could be a game-changer for the crypto industry, which has repeatedly criticized Gensler for what it perceives as a heavy-handed approach. Many are hopeful that Atkins will be more open to developing clear and practical regulations that allow crypto companies to thrive while still maintaining investor protection.
The Fight Isn’t Over: Coinbase, Ripple, and Beyond
While Gensler’s time at the SEC is nearing its end, the legal battles he started are far from finished. Major players in the crypto world, including Coinbase and Ripple, continue to challenge the SEC in court.
Coinbase, which has been embroiled in a legal dispute with the SEC over the classification of its digital assets, is currently appealing decisions that have favored the SEC’s stance on crypto regulations. In addition, the exchange has filed Freedom of Information Act (FOIA) requests, seeking to uncover whether the U.S. government orchestrated a campaign to “debank” crypto firms—a move that could potentially strengthen Coinbase’s case against the SEC. The exchange has also filed a separate lawsuit demanding the SEC establish clear rules for the industry, claiming that the lack of regulatory clarity has harmed both businesses and investors.
Ripple, which has faced off against the SEC in a prolonged legal battle over its XRP token, recently saw a court rule against the firm, holding it liable for $125 million in damages. However, both Ripple and the SEC have filed appeals, meaning the case is far from over. Meanwhile, other companies like Mango DAO have reached settlements with the SEC over alleged securities law violations, indicating that the regulator is still actively pursuing enforcement actions in the crypto space.
Looking Ahead: Will the SEC Change Under a New Administration?
As Gensler’s time as SEC chair draws to a close, the crypto industry is watching closely to see how the next administration will handle digital assets. With Trump’s pick of Paul Atkins on the table, it’s possible that the SEC’s approach to crypto could shift dramatically. However, given the ongoing legal challenges and regulatory uncertainty, the industry may not get the clarity it’s been asking for anytime soon.
For now, though, Gensler’s departure marks the end of a chapter in the ongoing saga of crypto regulation. Whether his successor will take a more lenient approach or double down on enforcement remains to be seen. What’s clear is that the crypto world isn’t backing down—and neither is the SEC.
Stay tuned, because the battle over crypto regulation is far from over, and Gensler’s legacy is likely to be debated for years to come.
