Gary Gensler, the announced choice of US President-elect Joe Biden to lead the SEC, said greater oversight of cryptocurrencies could lead to greater adoption by the general public.
Gary Gensler’s long-awaited appointment as head of the U.S. Securities and Exchange Commission marks the start of an era of heightened federal oversight of the $ 1 trillion cryptocurrency market.
Gensler, who recently taught cryptocurrencies and their underlying technologies at the Massachusetts Institute of Technology, previously chaired the Commodity Futures Trading Commission and was a partner of Goldman Sachs Group Inc. He is known to fend off banks and corporations. looking for investor protections.
In discussions and editorials over the past few years, he has advocated for a national way to register and monitor cryptocurrency exchanges, instead of leaving oversight to states. This could have implications for online exchanges like Coinbase Global Inc., which is considering going public. The SEC is also expected to continue to grapple with thousands of initial coin offerings, as Gensler said he believes most of those digital tokens are unregistered securities.
“It’s good to have a former banker in there who is smart enough to recognize the value of Bitcoin and other cryptocurrencies to create wealth and value in society,” said Tim Draper, a billionaire venture capitalist who is a large investor in cryptocurrencies. “He will understand the importance of enabling innovation, while watching out for banks that may attempt to restrict trade by blocking the use of a superior currency.”
In an interview with Bloomberg Television in 2018, Gensler said that purely monetary cryptocurrencies like Bitcoin “need more protection.” The world’s largest cryptocurrency by market cap quadrupled last year and has continued to soar in volatile trading since the start of 2021.
Gensler has also called for more regulation of cryptocurrency exchanges. He did not respond to a request for further comment.
“If it’s widely adopted, if we really believe the crypto world is going to be part of the future, it has to go into the public policy envelope,” Gensler said in the 2018 interview. means that we must guard against illicit activities. And yes, we need to protect investors. Crypto exchanges, large exchanges like Coinbase, must fall under the SEC or CFTC. “
Greater oversight could lead to greater adoption by the general public, he said.
“I would say you want some form of regulation, you want traffic lights and speed limits, because then the public is confident to drive on the roads,” Gensler said in the Bloomberg interview in 2018.
He has also long denounced illegal offers of securities, which the SEC is actively pursuing. In December, the agency filed a lawsuit against Ripple Labs Inc. for issuing more than $ 1 billion worth of unregistered XRP tokens. In a 2019 keynote address at Harvard Law School, Gensler said, “I don’t think the SEC is going to leave many ICOs out of the way.”
In his testimony to Congress in 2019, Gensler appeared to favor projects like Facebook-led Diem, which was once called Libra – an effort to create a cryptocurrency for payments. But he suggested the effort may require the application of banking regulations.
“Gary is extremely connected to the crypto markets and understands them extremely well,” said Nic Carter, co-founder of researcher Coin Metrics. “If his views expressed are any indication of his priorities as a commissioner, I would expect the SEC to continue or even accelerate its program of discouraging unregulated issuance of token securities.