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Joe Biden Considers Crypto-Friendly Former CFTC Chair Gary Gensler For Deputy Treasury Secretary

President-elect Joe Biden is considering Gary Gensler, the former Commodity Futures Trading Commission chairman, to become Deputy Treasury Secretary. Gensler has a crypto-friendly history and notably defined Bitcoin as a catalyst for change while his colleagues dismissed the cryptocurrency as a Ponzi Scheme.

Biden’s transition team is fast being filled with alumni from key federal agencies to prepare policies and staff for the new administration. President-elect Joe Biden is currently considering Gary Gensler, former Commodity Futures Trading Commission Chairman (CFTC) under Obama, to be the Deputy Treasury Secretary. Gensler’s selection to rein in Wall Street is set to bear fruits because he understands that world, having spent almost 20 years at Goldman Sachs in the 80s and 90s before he joined the Clinton administration as Assistant Secretary of the Treasury. Biden’s move to add Gensler to his roster indicates that pro-cryptocurrency regulation could be on the cards.

Gensler is currently leading Biden’s transition agency review team that is reviewing the Federal Reserve and securities and banking regulators. Gensler would report to Janet Yellen, the former Federal Reserve Chairperson, who Biden is reportedly set to select as Treasury Secretary. Despite her past warning against Bitcoin, Yellen has shown an interest in blockchain technology. The crypto community has even welcomed Yellen’s selection as Treasury Secretary.

Gensler served under President Obama’s administration as a key financial regulator (CFTC chairman) who assisted in spearheading new rules after the 2008 financial crisis. He also served during the Clinton administration in the Treasury Department.

Gensler was a professor at MIT Sloan School of Management, teaching a course about how blockchain and bitcoin could be used in finance. In 2018, he testified before Congress about blockchain and cryptocurrencies on several occasions, advocating against comparisons between Ponzi schemes and cryptocurrencies and saying that the much-awaited Libra cryptocurrency met the requirements of being security under the U.S law. In December 2019, Gensler called Bitcoin a “catalyst for change,” despite being prone to manipulation and scams. He further said that blockchain and crypto assets have already promoted real change.

Biden Administration Seen as A Good Thing for Cryptocurrencies

As Biden is set to become the U.S president in January next year, the crypto community is optimistic that the new White House would have a friendlier tone toward cryptocurrencies than what Trump’s administration did. Trump previously declared that he’s “not a fan of Bitcoin and other cryptocurrencies” and he even hired other crypto skeptics like Treasury Secretary Steven Mnuchin.

Although Biden’s team has not clarified how its administration would feel about crypto assets, the involvement of crypto-minded advisers like Gary Gensler is a positive indication and hope in the crypto world. Gensler understands blockchain and cryptocurrencies and can put the right team of regulators together that would be willing to work together towards advancing crypto policies.

Biden Appointed SEC Chair Gary Gensler is not Going to Save Ripple's XRP Token

Ripple CEO Brad Garlinghouse is celebrating President-elect Joe Biden’s decision to appoint Gary Gensler to SEC chair—but the appointment of the former CFTC chair will not make the lawsuit against XRP go away.

Former CFTC chair Gary Gensler has now been named as President-elect Joe Biden’s official choice to be the new chairman of the United States Securities and Exchange Commission (SEC) to replace Jay Clayton.

Ripple exec’s named in the lawsuit and XRP token holders appear to believe that Gensler’s appointment could be XRP’s saviour, but all indications show that the Ripple controlled cryptocurrency’s problems are far from over, and the former CFTC chair is not its saviour.

Despite Gensler’s documented belief’s that XRP is unregistered security, the XRP token has risen by almost 3% to a price of $0.28 since the official announcement.

Gary Gensler Next SEC Chair

President-elect Biden’s transition team to takeover financial policy of the United States includes former Commodity Futures Trading Commission (CFTC) Gary Gensler who will assume the SEC chair position vacated by Jay Clayton.

Along with his extensive experience in regulating financial markets, Gensler also has a long history in public policy and finance. Gensler is a senior advisor to the MIT Digital Currency Initiative and lectures on blockchain technology at MIT sloan.

The announcement is truly exciting for cryptocurrency advocates as the SEC is desperately in need of a more refined and balanced approach to crypto regulations in the US—and Gensler has publicly stated that the nascent industry needs public policy to succeed.

While it is a ray of light for cryptocurrency policy in general, XRP holders and Ripple’s exec’s really should keep the champagne corked for now as Gensler’s appointment also means that the SEC’s lawsuit against Ripple for the alleged sale of XRP as unregistered securities is very likely set to move forward with the new chair.

Gensler “Believes” XRP Is a Security

On news of the announcement, Ripple CEO Brad Garlinghouse—who has been personally named in the SEC’s lawsuit along with co-founder Chris Larsen—took to Twitter to celebrate. Garlinghouse wrote:

“Congrats to Gary Gensler! We’re ready to work with SEC leadership and the broader Biden administration to chart a path forward for blockchain and crypto innovation in the US.”

Unfortunately for Garlinghouse and XRP holders, the SEC’s lawsuit is already in progress and Gensler taking over means a very high likelihood that charges will not be dropped.

Gensler stated in 2018 during a lecture at MIT that he does believes that the XRP token is a non-compliant security. Gensler’s belief—which he admits is just a belief and will be decided by the US courts not the SEC alone—is based on a very simple concept. Gensler told his classroom that he believes XRP is and non-compliant security-based on the Howey Test as Ripple continues to sell XRP tokens while controlling the majority stake, that Ripple is a common enterprise and that there is arguably little use for XRP without Ripple’s control.

In 2018, in response to a student’s question on the status of XRP, Gensler clearly stated:

“Hugo asked about the token XRP and whether I think it’s a non-compliant security. I’ve spoken publicly. Yes, I do think it’s a non-compliant security.It will be resolved by some courts, whether it’s appellate courts or the Supreme Court”

By all logical conclusions, the SEC’s lawsuit against Ripple is going ahead—and XRP holders should find no real relief from Gensler’s appointment alone.

Despite a slew of XRP delistings on major exchanges, there have been few legal developments in the SEC proceedings since Ripple CEO Brad Garlinghouse made a statement on Jan. 7. The legal case will proceed in February when both parties file responses.

Bitcoin Recovers from Plunge Triggered by Confirmation Hearing for SEC Chair Nominee Gary Gensler

Bitcoin (BTC) has gained momentum to trade at $49,242 at the time of writing, representing more than a 4% gain after revelations by Gary Gensler, the nominee for chairman of the U.S. Securities and Exchange Commission (SEC), on March 2 caused a slight plunge.

Curbing fraud in the crypto markets is a challenge

During the Senate confirmation hearing, Gensler disclosed that making crypto markets free of manipulation and fraud was a difficulty the SEC was facing. He acknowledged:

“The SEC must ensure that the crypto market is free of fraud and manipulation, and I think that’s the greater challenge, frankly, because some markets, usually operating overseas, have been rife with fraud.”

The revelation that the crypto space necessitated tougher regulatory oversight caught some enthusiasts off-guard, leading to Bitcoin experiencing a slight drop.

Nevertheless, BTC has been gaining strong momentum past the $48,000 barrier, which is seen as the institutional resistance level, given that nearly 1.03 million addresses previously bought over 425,000 Bitcoin at this range.

Cryptocurrencies have brought new thinking to payments and financial inclusion

Gensler revealed his positive sentiments towards cryptocurrencies as he affirmed his commitment to promoting this innovation. He explained:

“Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion, but they’ve also raised new issues of investor protection. If confirmed at the SEC, I will work to promote innovation.”

He added:

“Markets and technology are always changing. Our rules have to change along with them. In my current role as a professor at MIT, I research and teach on the intersection of technology and finance. I believe financial technology can be a powerful force for good, but only if we continue to harness the core values of the SEC in service of investors, issuers, and the public.”

John Wu, the president of blockchain technology company Ava Labs, has stated that he was hopeful that the new administration would foster innovation in digital assets, cryptocurrencies, and blockchains instead of stifling it.

SEC Chair Gary Gensler Asks Congress to Regulate Crypto Exchanges

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Gary Gensler, the newly appointed chairman of the US Securities and Exchange Commission, has requested that the US Congress make some major decisions regarding cryptocurrency regulation.

The SEC chair addressed this during a hearing hosted by the House Financial Service Committee, where market volatility surrounding the GameStop stock price jump witnessed early this year was discussed.

Gensler made such comments as a response to a question asked by Rep. Patrick McHenry about what the SEC would do to ensure that the crypto industry remains compliant with the law and conforms with legitimate use cases.

Gensler responded that US investors lack protection when they trade Bitcoin on crypto exchanges. He therefore asked US Congress to consider upping investor protection for crypto exchanges.

Gensler stated that since crypto exchanges do not have a regulatory framework provided by the SEC or the Commodity Futures Trading Commission (CFTC), US Congress was the one responsible for instilling greater investor confidence through regulating crypto exchanges.

Although the SEC’s authority involves regulating digital assets that the regulator considers securities, Bitcoin does not fall under this category.

Gensler stated that Bitcoin is a commodity under US law and is not subject to the SEC’s oversight. He said:

“There’s a lot of authority that the SEC currently has in the securities space, and there are a number of cryptocurrencies that fall within that jurisdiction. But there are some areas, particularly Bitcoin trading on large exchanges, that the public is not currently really protected.”

Without a strong market regulatory oversight on crypto exchanges, Gensler said that there is no protection against manipulation or fraud. He said that the 2 trillion crypto market could benefit from greater investor protection and therefore suggested that Congress play an active role in bringing greater regulatory clarity, especially around exchanges. Gensler said:

“It’s only Congress that can really address it. It would be good to consider whether to bring greater investor protection to the crypto exchanges.”

Regarding the GameStop frenzy, Gensler talked about the role of online communities such as Reddit in boosting stock prices. He however stated that he is not interested in curtailing the freedom of expression, but rather that he was more interested in seeing whether malicious actors took advantage of such communities to manipulate markets.

He disclosed that the SEC plans to release a report this summer evaluating the GameStop trading craze and the reaction to it.

Fixing Gaps in Crypto Industry

Gensler was sworn in as the chairman of the SEC last month. During his nomination, he suggested that more government oversights of crypto assets will be coming. His appointment could have a significant impact on the cryptocurrency industry. Crypto advocates have projected that under his leadership, the US could see a Bitcoin ETF approval and the much-needed regulatory clarity in the field of digital assets.

As a former Commodity Futures Trading Commission chairman and former Goldman Sachs investment banker, Gensler has a great wealth of experience to serve as SEC chairman. What sets him apart from his predecessors is that Gensler is the first blockchain technology and crypto expert to head the SEC. He was a professor who taught the course “Blockchain and Money” at the MIT Sloan School of Management and he regards Bitcoin as a “catalyst for change.”

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Gary Gensler Wants Congress to Back the SEC in Regulating Crypto

Gary Gensler, the Chairman of the United States Securities and Exchange Commission (SEC), has requested Congress to grant it more power to oversee the ever-evolving digital currency ecosystem.

Per a CNBC report, Gensler made this known as the Aspen Security Forum held on Tuesday, saying the SEC will always exercise its “authorities as far as they go.”

“Certain rules related to crypto-assets are well settled. The test to determine whether a crypto asset is a security is clear,” he said. “There are some gaps in this space, though: “We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector.”

Gensler has broad experience as a blockchain and crypto lecturer at the Massachusetts Institute of Technology, Gensler said he would take a hands-on approach to monitor the crypto industry, a move that will be complemented should lawmakers grant the agency the right to regulate crypto exchanges.

Protecting consumers’ interests has become the core concern of regulators. Based on this, regulators in the United States have always restricted the type of products commonplace in the crypto world from being marketed in the country. A notable example is Initial Coin Offerings (ICOs). The firm has had a major legal battle with firms that offer this product to its masses, with social messaging giant Telegram being amongst those who met with the strong arm of the SEC in that regard.

Gensler’s call also comes following a prompting from Sen Elizabeth Warren, who called on Treasury Sec Janet Yellen and all regulators to provide the needed oversight to protect consumers from crypto scams in the country. Should Congress redefine the powers of the SEC over the crypto space, more clarity in digital currency regulation may be published, keep blockchain startups in check, and stir consumer confidence to bet on crypto products.

CFTC Commissioner Brian Quintenz: US SEC Has No Authority Over Cryptocurrencies

CFTC republican commissioner Brian Quintenz has challenged the US Securities and Exchange Commission chair Gary Gensler’s claim that most cryptocurrencies are securities and therefore fall under the SEC’s jurisdiction.

On Wednesday August 5, commissioner Quintenz tweeted that: “the SEC has no authority over pure commodities or their trading venues whether those commodities are wheat, gold, oil… or #crypto assets.” Quintenz’s comments come after Gensler stated this week that many cryptocurrencies should be considered as securities.

Shortly after, the US House Committee on Agriculture responded to Quintenz’s tweet, stating: “#crypto is bigger than the SEC,” Therefore, the committee further said that Congress should create regulations to regulate the crypto landscape.

Meanwhile, Christopher Giancarlo, the former chairman of the US Commodity Futures Trading Commission (CFTC), who is also known as “crypto dad”, stated his views on the conversation, saying that the CFTC was the only agency with the experience to regulate Bitcoin and cryptocurrency markets, not the US SEC.

Giancarlo further urged the Biden Administration to nominate a new CFTC chairman to generate “sensible cryptocurrency regulation.”

Currently, Rostin Behnam is serving as the acting chairman of the CFTC after succeeding Heath Tarbert in January 2021.

The Regulatory Obstacles

Cryptocurrencies have surged in price recently amid rising interest by the public, investors of all kinds, and financial firms.

Despite a steady acceptance, the future regulatory framework for such assets remains uncertain and complex. Developing a new framework is a huge task, involving several stakeholders and extending beyond highly publicised bitcoin and crypto-assets.

Several challenges are facing a rollout of new cryptocurrency regulations in the US. The biggest obstacle is jurisdictional overlap and friction among regulators.

Although the SEC is majorly seen as the larger and more powerful markets regulator, the CFTC, the Federal Reserve Board, the FinCEN, and Treasury will still have input. The matter is further complicated by the complex and evolutionary nature of cryptocurrencies, which has led to differing interpretations from the various regulators.

While the SEC sees cryptocurrencies as securities, the CFTC sees them as commodities. The Treasury views them from currencies while the Internal Revenue Service treats them as property for tax purposes.

With such differing viewpoints, it may be up to the Financial Stability Oversight Council (FSOC) and Treasury Secretary Janet Yellen to lead the overall course of action. But Yellen is seen as a bit more of a crypto sceptic, as recently, she raised concerns associating cryptocurrencies with potentials for terrorism financing and money laundering.

US SEC Boss Gary Gensler Calls to Regulate DeFi Projects

In an interview with the Wall Street Journal on August 19, the US Securities and Exchange Commission chairman Gary Gensler warned that decentralized finance (DeFi) platforms are not immune to oversight by the market regulator.

Gensler went further and said that DeFi projects have features that make them look like the type of entities regulated by the SEC. The SEC chair clarified that DeFi projects that reward participants with valuable digital tokens similar incentives could enter territory subject to the SEC regulation.

In short, Gensler hinted that the regulator could start regulating DeFi platforms.

In the past, the SEC has been targeting centrally-operated crypto firms that have sold cryptocurrencies, or run exchanges, investment funds, or ICOs.

Despite DeFi platforms being decentralized, with no central entity in charge, Gensler has claimed that such platforms have an organized and transparent set of developers governing each project.

He pointed to individuals involved in the DeFi industry as “promoters” and “sponsors.”

“There’s still a core group of folks that are not only writing the software, like the open-source software, but they often have governance and fees. There’s some incentive structure for those promoters and sponsors in the middle of this.”

The SEC chairman argued that the term of DeFi is not necessarily accurate, calling it “a bit of a misnomer”. “These platforms facilitate something that might be decentralized in some aspects but highly centralized in other aspects,” Gensler said.

More Investor Protections Needed

This is not the first time that Gary Gensler has called for tougher regulation on DeFi. In the past, the SEC chairman suggested that the decentralized finance landscape could be in the business of selling unregistered securities.

On August 3, Gensler spoke at the Aspen Security Forum, where he said that thousands of crypto assets or tokens are operating as unregistered securities. The SEC chair admitted that currently, there is no adequate investor protection in cryptocurrency.

During that time, Gensler stated publicly that he wants more regulation for exchanges and seeks to cooperate with Congress on that issue. He expressed the desire for Congress to grant the SEC additional powers and resources as it expands its oversight of the cryptocurrency. His speech focused on key areas like tokens classified as securities, stablecoins, DeFi platforms, and financial products tied to crypto, such as exchange-traded funds.

Gensler joined senators like Elizabeth Warren in calling for more robust consumer protections within the crypto industry.

SEC Chair Calls for Open Dialogue in Pursuit of a Regulated Crypto Market

Gary Gensler, the Chairman of the United States Securities and Exchange Commission (SEC), wants an inclusive and transparent capital market with plans to extend oversight to the crypto ecosystem.

According to a statement detailing the proposed speech of the Chairman ahead of his testimony before the United States Banking Committee on Tuesday, September 14, Gensler believes the crypto market is replete with fraud.

“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” the Chairman wrote, adding:

“Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications.”

Gensler noted that the country’s digital currency ecosystem could do better. The commission will be working along two major lines; bridging all gaps through the help of regulators, and working with other regulators with overlapping oversights on the cryptocurrency ecosystem.

“With respect to investor protection, we’re working with our sibling agency, the CFTC, as our two agencies each have relevant, and in some cases, overlapping jurisdiction in the crypto markets. Concerning a broader set of policy frameworks, we’re working with not only the CFTC but also the Federal Reserve, Department of Treasury, Office of the Comptroller of the Currency, and other members of the President’s Working Group on Financial Markets on these matters,” Gensler added.

In all, the Chairman will inform the lawmakers how he hopes to promote inclusiveness amongst the key stakeholders in the crypto ecosystem by encouraging them to come and engage the commission with details of their plans. Gensler notably affirmed that he has oftentimes “suggested that platforms and projects come in and talk to us” so the agency can help categorize whether the tokens listed on their platforms are securities or not.

Gensler will end the section on crypto by affirming that he is technology-neutral. His ultimate aim is to collaboratively bring regulations to the highest regulatory controversial digital currency ecosystem. Part of these controversies fueled the ongoing Ripple-SEC legal tussle, an occurrence that will be prevented with the promise of comprehensive regulation.

US SEC Chair Gary Gensler: Coinbase and Other Crypto Exchanges Must Register with Agency

The US Securities and Exchange Commission Chairperson Gary Gensler has stated that cryptocurrency exchanges should come in and talk to the market regulator. The SEC boss made such a statement just a few days after aiming for the Coinbase trading platform over one of its products.

Gensler appeared before the Senate Banking Committee on Tuesday, September 15, where he intensified the pressure on cryptocurrency exchanges, saying he would like to regulate them.

The SEC chair warned that cryptocurrency exchanges like Coinbase should register with the regulator, which he previously raised concerning whether cryptocurrency trading platforms qualify as securities exchanges.

Gensler mentioned that exchanges should register with the agency, as some of their tokens or products may be securities, unlike Bitcoin, which regulators think is more like a commodity.

“I’ve suggested that platforms and projects come in and talk to us. Many platforms have dozens or hundreds of tokens on them,” Gensler said. “There are securities on these trading platforms; under our laws, they have to register with the Commission unless they qualify for an exemption,” he added.

In his prepared remarks for the committee, the SEC’s Chairman talked about the need for cryptocurrency trading platforms to register as securities trading platforms.

While Gensler did not mention any specific companies, he reiterated that any exchange that has security listed must register with the SEC.

Crypto Regulation Problem

The announcement from the US SEC comes a few days after the commission told Coinbase Global Inc that it plans to sue the crypto exchange if it goes ahead with plans to launch a program that allows users to earn interest by lending digital assets.

On September 9, Gensler stated that products that bear a specific interest-rate return could fall under SEC oversight as securities and also hinted that some stablecoins should also fall under that category.

During that time, the SEC threatened to sue Coinbase if the cryptocurrency exchange goes ahead with its program called “Lend”, which allows users to earn interest by lending crypto assets.

Coinbase now plans to delay the launch of its “Lend” product until at least October.

In response, Coinbase CEO Brian Armstrong criticised the commission’s handling of the exchange’s plan to roll out a lending product, which the SEC has determined to be a security.

Armstrong accused the commission of “really sketchy behaviour” and stated that he failed to see how the lending product was security. He disputed the SEC’s determination, saying “Lend” is not an investment contract or note. Armstrong stated that Coinbase was threatened with legal action before the SEC gave a single bit of actual guidance to the crypto industry.

Meanwhile, crypto-industry figures and some lawmakers need the SEC to clarify what it thinks it can and can’t regulate.

In his prepared remarks, Gensler stated that the SEC is working with the Federal Reserve, the Treasury, the commodities regulator, and other agencies on a regulatory framework.

Gary Gensler Reiterates US SEC’s Support for Bitcoin Futures ETFs

Gary Gensler, the US Securities and Exchange Commission chairman, has once again reiterated his support for Bitcoin Exchange Traded Funds (ETFs) that would invest in futures contracts instead of the cryptocurrency itself.

On Wednesday, September 29, the SEC boss talked to the Financial Times “Future of Asset Management North America Conference”. He noted that products providing exposures to crypto-assets have been around for several years. He stated that there are a number of open-end mutual funds that invest in Bitcoin futures contracts that trade on the CME (Chicago Mercantile Exchange) and register under the Investment Company Act of 1940.

Gensler cited the so-called 1940 Act that offers significant investor protections for mutual funds and ETFs.

In prepared remarks for the Financial Times conference, the SEC chair stated that he expects his staff to review filings to offer crypto-related ETFs, especially those investing in CME Bitcoin futures. “I look forward to staff’s review of such filings,” Gensler said.

The SEC is in the process of conducting reviews for almost 20 ETF filings for Bitcoin and Bitcoin futures products, among others, but so far, the agency has approved none.

The agency has been concerned about potential fraud, market manipulation, and liquidity issues. It has declined to approve Bitcoin ETFs for many years despite a series of applications for such products.

Race for Bitcoin ETFs Taking Shape

In August, Gensler first shared his support for a Bitcoin futures ETF, supported by the 1940 laws, when he stated that he would be open to Bitcoin funds coming to the market under certain conditions. Since the SEC chair hinted that the agency might look favourably on investment vehicles tied to Bitcoin futures instead of products planning to hold Bitcoin directly, several investment companies rushed for Bitcoin futures ETFs filings.

Of course, the SEC looks more favourably on futures-based products because Bitcoin futures have more regulatory oversight than Bitcoin itself. After all, Bitcoin futures are products of already-regulated entities rather than a decentralized network.

Products tied to Bitcoin futures contracts are traded on the Chicago Mercantile Exchange and regulated by the Commodity Futures Trading Commission.