Gary Gensler’s Actions Threaten American Innovation and Interests in the Crypto Space

Gary Gensler’s Actions Threaten American Innovation and Interests in the Crypto Space

Gary Gensler, the current chair of the SEC, finds himself in an unfavorable position. While there are rumors of his ambition to attain Janet Yellen’s Treasury role, sources on Capitol Hill indicate that his chances are slim. Not only does he face opposition from cryptocurrency enthusiasts, but also from various factions within the US government.

While popularity is not a prerequisite for his current position, competence certainly is. Unfortunately, Gensler’s competence has been noticeably absent. Under his leadership, the SEC has transformed into a weapon for individuals who fear the potential disruption to the hegemony of the US dollar.

This weaponization of the SEC threatens the future economic power of the United States. Digital assets are an inevitable part of the technological revolution that financial markets will eventually embrace. In this regard, America faces a choice: to lead or to follow. Regrettably, Gensler’s SEC has chosen to turn a blind eye to progress, stifling innovation and driving talented individuals away. Consequently, the United States is relinquishing its leadership in tomorrow’s financial markets to more forward-thinking regimes abroad, including those in Europe, the Middle East, and even countries viewed as hostile powers.

The consequences extend beyond entrepreneurs and the national interest. In the recent action against Binance, Gensler once again demonstrates that investor protection, a key mission of the SEC, sits at the bottom of his list of priorities. Millions of Americans hold cryptocurrencies, and many likely possess the tokens that Gensler unilaterally declared as securities. The SEC‘s refusal to engage in meaningful discussions regarding the classification of assets as securities harms these individuals repeatedly.

As markets react to Gensler’s actions, we are reminded that the laws he believes govern cryptocurrencies were enacted over 90 years ago. Instead of engaging constructively with token issuers, Gensler spends his time creating videos that defend his belief that all digital assets are securities. However, this viewpoint seems to be shared by few aside from Gensler himself.

While it is often mentioned that Gensler is an unelected bureaucrat, it is important not to oversimplify the matter. It is easy to assign blame to those with whom we disagree. However, Gensler is well aware of the bipartisan opposition to his agenda, and it is Congress, not bureaucrats, that should be responsible for defining participation in our capital markets. The urgent desire within Congress to take on this responsibility is evident.

By persisting on his current path, Gensler fails to fulfill the duty that even unelected bureaucrats have toward our democratic norms. The financial markets of the future will inevitably become tokenized, leveraging blockchain technology and featuring new entities with decentralized elements that do not neatly fit into existing securities laws.

Yet, a single government agency has taken it upon itself to impede this progress, ensuring that America becomes an unwilling and reluctant participant, if a participant at all, in the development of the future global financial system.

Gary Gensler’s actions are detrimental to American innovation, American investors, and American interests. It is time for him to step down.