{"id":22766,"date":"2024-11-14T22:11:14","date_gmt":"2024-11-14T22:11:14","guid":{"rendered":"http:\/\/www.thinkadvisor.com\/2024\/11\/14\/gensler-makes-final-pitch-on-sec-crypto-rules\/"},"modified":"2024-11-14T22:11:14","modified_gmt":"2024-11-14T22:11:14","slug":"gensler-makes-final-pitch-on-sec-crypto-rules","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2024\/11\/14\/gensler-makes-final-pitch-on-sec-crypto-rules\/","title":{"rendered":"Gensler Makes Final Pitch on SEC Crypto Rules"},"content":{"rendered":"
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Gary Gensler is making a final pitch for how the SEC should be allowed to regulate cryptocurrency markets ahead of the incoming Trump administration and its enthusiasm for digital assets.<\/p>\n

In remarks prepared for a Thursday legal conference in New York, the Securities and Exchange Commission chair repeated that the agency should be focused on \u201crules of the road\u201d that apply to crypto sales and intermediaries, such as brokers and exchanges, to promote proper disclosure.<\/p>\n

The experience of the Great Depression, where so many investors were wiped out and the economy went into a tailspin, taught policymakers about the importance of \u201cprovisions about disclosure because information about securities creates a public good,\u201d Gensler said at the Practicing Law Institute\u2019s annual securities regulation conference.<\/p>\n

Gensler reaffirmed that Bitcoin itself isn\u2019t a security, a position taken by his predecessor during the first Trump administration, Jay Clayton.<\/p>\n

\u201cOur focus, rather, has been on some of the 10,000 or so other digital assets,\u201d that total up to about $600 billion, less than 20% of the crypto market when Bitcoin, Ether and stablecoins are carved out, he said.<\/p>\n

Waning Days<\/h2>\n

Gensler commented as the clock begins to run out on the current administration, and perhaps on his approach to regulating crypto. The next Republican administration at the SEC likely won\u2019t share his view of the digital asset industry as being rife with noncompliance, or that participants must abide by the same decades-old securities rules as traditional exchanges and issuers.<\/p>\n

President-elect Donald Trump has pledged to create a friendly regulatory framework for crypto, set up a strategic Bitcoin stockpile and make the US the global hub for the industry. A onetime crypto skeptic, Trump changed tack after digital-asset firms spent heavily during election campaigning to promote their interests.<\/p>\n

The Heritage Foundation\u2019s Project 2025 has vowed to significantly whittle the size and powers of the SEC watchdog. While Trump has distanced his policy views from Project 2025, some of his allies, such as Elon Musk, have vowed to undertake similar plans through the newly announced Department of Government Efficiency.<\/p>\n

\u201cElections have consequences, and they should,\u201d Gensler said. \u201cI am proud to continue on Chair Clayton\u2019s leadership,\u201d he said. \u201cWe didn\u2019t actually differ that much,\u201d referring to the lack of disclosures from the industry and crypto intermediaries not separating out their different business lines.<\/p>\n

Court Cases<\/h2>\n

Gensler touted the SEC\u2019s legal wins on crypto-related investment products. \u201cCourt after court has agreed with our actions to protect investors and rejected all arguments that the SEC cannot enforce the law when securities are being offered \u2014 whatever their form,\u201d he said.<\/p>\n

Far fewer crypto enforcement cases may soon make their way to court, however. The agency\u2019s two Republicans, and whoever is nominated and confirmed to lead the agency, are likely to reverse what many in the industry view as an enforcement blitz against firms for failing to register their platforms or their tokens.<\/p>\n

Already, the two Republican commissioners have been discussing how to divvy up control of the SEC\u2019s portfolio until a final chair is confirmed, according to multiple people familiar with the matter. Some of the scenarios would see Mark Uyeda, the more junior of the two, named acting chair by Trump, while Hester Peirce, affectionately dubbed \u201cCrypto Mom\u201d by digital asset fans, would hold full executive powers on matters specific to crypto, the people said, who asked for anonymity to describe the private talks.<\/p>\n

All such scenarios would be subject to Trump\u2019s final decision-making. Representatives for Peirce and Uyeda declined to comment.<\/p>\n

Other personnel changes are afoot as well, with some top Gensler officials planning their departures. Jessica Wachter, the head of the Division of Economic and Risk Analysis, and Haoxiang Zhu<\/a>, head of the Division of Trading and Markets, are leaving in December to resume teaching at the Wharton School of Business and at the Massachusetts Institute of Technology, respectively.<\/p>\n

Both universities confirmed the officials were returning in January.<\/p>\n

DERA plays a hand in SEC rulemaking by providing economic impact and compliance cost estimates, among other analyses. Zhu\u2019s division has tackled massive rethinks of market structure. Some of those efforts are resulting in significant changes for global markets and may boost financial resiliency in the next crisis, such as measures to centrally clear US Treasuries trading or shortening the equities settlement cycle.<\/p>\n

Other major projects likely won\u2019t be finalized, including new best-execution requirements for equities trading and the concept of submitting trade orders to auctions between exchanges and wholesalers like Citadel Securities and Virtu Financial Inc.<\/p>\n

Wachter and Zhu didn\u2019t respond to requests for comment. An SEC representative said the agency doesn\u2019t comment on personnel matters.<\/p>\n

Credit: Adam Auel<\/i><\/p>\n

Copyright 2024 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n","protected":false},"excerpt":{"rendered":"

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