Gary Gensler discussed the SEC’s crypto regulations, emphasizing the distinction between Bitcoin and altcoins, and hinted at resigning amid Trump’s election and criticism. His speech concluded with a possible farewell message.
On November 14, Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), delivered a comprehensive address at the PLI Annual Institute on Securities Regulation.
His remarks underscored the SEC’s approach to crypto regulation, with a consistent emphasis on the distinctions between Bitcoin and altcoins.
Gary Gensler Credits SEC for Bitcoin ETFs
Gensler’s language also suggested that he may resign in response to Donald Trump’s election and the President-elect’s explicit criticism of his tenure. He concluded his speech with a message that could be interpreted as a departure.
“The SEC and its staff. It’s a remarkable agency… It’s been a great honor to serve with them, doing the people’s work…
I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance.”
In what could potentially be one of his final statements as SEC chief, Gensler took the opportunity to reaffirm Bitcoin’s classification as a non-security asset, thereby distinguishing it from the vast majority of the crypto market. Gensler stated,
“Not every asset is a security. Former Chairman Clayton and I have both said that bitcoin is not a security, and the Commission has never treated bitcoin as a security.
Our focus, rather, has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities”
This posture is in stark contrast to the agency’s enforcement actions against other digital assets, which have collectively accounted for 5–7% of the SEC’s regulatory focus since 2018.
The SEC’s rationale for targeting particular altcoins was emphasized in the speech. Gensler underscored the importance of adhering to securities laws in order to safeguard investors and maintain market trust. “For ninety years, history has demonstrated that effective securities regulation promotes innovation and establishes trust in markets,” he stated.
Nevertheless, he recognized that a significant number of digital assets, not including Bitcoin, still lack sustainable use cases. He emphasized that speculative investment and illicit activities are the primary concerns.
A critical aspect of Gensler’s remarks was his emphasis on emphasizing his endorsement of exchange-traded products (ETPs) for Bitcoin futures, spot Bitcoin, and Ethereum.
Gensler emphasized that these approvals represent a departure from the policies of previous SEC chairmen, who restricted access to crypto ETFs that were physically backed.
The SEC’s approval of the spot Bitcoin and Ethereum ETFs, as per Gensler, facilitated the provision of benefits such as disclosure, lower fees, and competition, in contrast to “non-compliant crypto-asset markets.”
Donald Trump’s victory in the November election has introduced a new dimension to Gensler’s tenure. The chair’s reflective demeanor may be attributed to the President-elect’s public commitment to replacing Gensler.
Gensler seemed to position his legacy as part of a broader institutional mission by remarking that the SEC’s effective administration fosters trust.
The sensitivity of the market to political and regulatory forces is exemplified by the dramatic increase of over 30% in Bitcoin since the election results were announced.
The rally has been associated with optimism regarding prospective deregulatory policies implemented by the Trump administration, according to analysts. On November 13, Bitcoin surged to $93,400 amid anticipations of diminished regulatory oversight.
Gensler’s comments also provided context for the position of cryptocurrency within the global financial system.
He observed that the remaining crypto market, which is valued at approximately $600 billion, accounts for less than 20% of the total crypto capitalization, with the exception of Bitcoin, Ethereum, and stablecoins.
The fragmented and speculative nature of this subset, he contended, presents the most significant obstacles to effective compliance.
Gensler concluded his speech with personal reflections on the significance of securities regulations, likening their function to the “rules of the road” in financial markets, amid speculation about his forthcoming resignation.
Gensler’s approach to crypto regulation has had a lasting impact on the sector, regardless of whether his tenure concludes shortly or extends into the next administration.
Gensler appears to be advocating for stablecoins, Ethereum, and Bitcoin during his tenure as SEC chair. Nevertheless, his proposal may not be persuasive to Ethereum stakers, Robinhood, Kraken, Crypto.com, and Coinbase.
He seems to believe that Bitcoin is essentially different from altcoins and that only Ethereum and stablecoins are exempt from SEC regulation, as evidenced by this speech.
