Gary Gensler was confirmed by the Senate in a 53-54 vote as the new chair of the U.S Securities and Exchange Commission (SEC) earlier this week.
What Happened: Gensler’s confirmation is likely to have a significant impact on the crypto industry, and industry proponents have hypothesized that the U.S could soon see a Bitcoin ETF approval, in addition to the “much needed” regulatory clarity in the realm of digital assets.
“While the SEC has a reputation as a black hole for innovators, Gary Gensler recognizes the potential of digital assets,” tweeted Senator Cynthia Lummis on the eve of Gensler’s confirmation.
As a former Goldman Sachs Group Inc GS investment banker and CFTC Chairman, Gensler was always a popular candidate to assume the role of SEC Chair.
What sets him apart from his predecessors is that he will be the first cryptocurrency policy and blockchain technology expert to take the reins at the SEC.
Gensler, who taught the course “Blockchain and Money” at MIT, has called it a “catalyst for change.”
“Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion. But they’ve also raised new issues of investor protection that we still need to attend to,” said Gensler at his nomination hearing.
Why It matters: The implication of a Gensler-led SEC could be far-reaching, especially if a focus on digital assets is on the agenda.
SEC Commissioner Hester Peirce, who is often referred to as “Crypto Mom” for her positive outlook towards crypto, recently released an updated version of her token safe harbor proposal.
The proposal allows decentralized finance companies issuing tokens on their native blockchain a three-year grace period to develop their network exempt from the registration provisions of the federal securities laws so long as certain conditions are met.
“Now, as a new Chairman is coming into the SEC with a new agenda, is the perfect time for the Commission to consider afresh how our rules can be modified to accommodate this new technology in a responsible manner,” said Peirce in a statement.
The SEC’s ongoing lawsuit against Ripple (XRP) is an example of the ambiguity around the current regulatory landscape for cryptocurrencies. Filed in the final months of Jay Clayton’s time as SEC Chairman, the lawsuit alleges that Ripple’s native cryptocurrency XRP is a security, and its initial distribution was an “illegal securities offering.”
In light of Gensler’s appointment as the new chairman, XRP advocates have already petitioned Gensler to “end the war on XRP.”
While Gensler’s era promises a variety of changes to the crypto environment, market proponents were inarguably most excited by the prospect of a Bitcoin ETF approved in the near future.
So far, nine Bitcoin ETFs are pending approval, including those filed by Fidelity, Skybridge Capital, and VanEck Global.
“Markets — and technology — are always changing. Our rules have to change along with them,” said Gensler.
Price Action: Bitcoin was trading lower at $61,464 at the time of writing. The market-leading cryptocurrency was down nearly 5% from its all-time high of $64,716 recorded in the hours leading up to Coinbase Global Inc’s COIN direct listing.
Most cryptocurrencies recorded losses overnight, with the exception of DOGE that climbed 76% in the past 24-hours and over 300% in the past seven days.
Image: Official photograph via Wikipedia
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