The Chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, has come under heavy criticism from the digital asset industry. He is accused of favoring TradFi traders and wrongly prejudging that all digital assets are securities.
Crypto lawyers and industry advocates have been putting pressure on Gensler to recuse himself as arbitrator and judge in digital asset enforcement actions. In this article, we’ll look at the allegations and what implications this could have for the future of cryptocurrency regulation.
Gensler’s request for disqualification.
Gensler’s stance of classifying all cryptocurrencies except Bitcoin as securities has generated controversy in the digital asset industry. Jake Chervinsky, a lawyer and Chief Policy Officer of the Blockchain Association, has urged Gensler to recuse himself from all enforcement decisions related to digital assets.
According to Chervinsky, Gensler is not a neutral arbitrator and has wrongly prejudged the nature of digital assets. Crypto lawyers argue that all SEC enforcement actions must follow the “Wells Process”, in which SEC commissioners serve as neutral arbitrators. The pressure on Gensler to recuse himself is intensifying as criticism of his regulatory approach mounts.
Working in the interest of TradFi?
Some observers suggest that Gensler is cracking down on crypto companies with the aim of benefiting traditional financial institutions (TradFi) such as JPMorgan and BlackRock. Recently, Binance and Coinbase, two of the leading digital asset service providers, were sued by the SEC for listing unregistered securities.
This coercive action caused the loss of value of several cryptocurrencies and generated millions in losses for investors. Interestingly, shortly after these lawsuits, asset management company BlackRock launched a Bitcoin exchange-traded fund (ETF). This has led to speculation that Gensler could be paving the way for traditional financial institutions in the crypto space.
The consequences for investors.
The SEC’s actions under Gensler’s leadership have had a significant impact on cryptocurrency investors. The classification of various cryptocurrencies as securities has led to their decline in value, resulting in losses for investors.
Although Gensler argues that these measures are aimed at protecting investors, critics point out that the real beneficiaries could be traditional financial institutions. The lack of an official statement or regulation by Congress regarding the classification of cryptocurrencies as securities has raised suspicions about Gensler’s true intentions and his regulatory approach.
Pressure on SEC Chairman Gary Gensler to recuse himself from cryptocurrency enforcement actions has mounted amid accusations of favoring TradFi traders and misjudging the nature of digital assets.
Crypto lawyers and industry advocates argue that Gensler is not a neutral arbitrator and that all SEC actions must follow the “Wells Process” to ensure an impartial assessment.