“You Need to Resign”: Crypto Fans Slam Gensler’s Regulation Comments

Several leading cryptocurrency personalities asked Gensler to approve a Bitcoin spot ETF in response to the piece.

Gensler says Crypto needs securities laws

Gary Gensler’s latest comments on the digital asset market have gone down like a lead ball in the cryptocurrency community.

The SEC president published an editorial titled “The SEC Treats Crypto Like the Rest of the Capital Markets” in The Wall Street newspaper On Monday, discussing how he thought cryptocurrencies should be regulated to protect investors. In the piece, Gensler said that “there is no reason to treat the cryptocurrency market any differently than the rest of the capital markets” just because it uses the new technology, echoing his claims that securities laws should apply to digital assets as traditional financial instruments do.

Gensler drew attention to BlockFi and other cryptocurrency lending platforms that faced insolvency crises in the June market crash, saying they must comply with regulations regardless of how they market their services. “Over decades of cases, the Supreme Court has made it clear that the economic realities of a product, not the labels, determine whether it is a stock,” Gensler said, referring to lending platforms, cryptocurrency exchanges and DeFi applications. He added that all lenders offering securities fall under the jurisdiction of the SEC and warned that the agency will act as a “poised policeman” for any entity that does not protect consumers.

Community Slate WSJ Piece

While some praised Gensler for his comments, several members of the crypto community shot him on Twitter for the blocked piece. “You cannot have local ledgers for a global financial system accessible without authorization … Think you are too stupid to understand”, She said Leigh Drogen, Chief Investment Officer of Starkiller Capital. “This US government official bluntly deleted his paywall link instead of openly acknowledging that he basically thinks the entire global economy should already simply conform to US regulations as if America were truly the legal capital of the globe. “, added DefiDi ◎ genes.

Also Meltem Demirors, CoinShares Chief Strategy Officer weighed. “Instead of writing editorials, perhaps the agency could try (a) to interact with market participants it should oversee and then (b) establish workable pragmatic rules and apply them in the same way,” she wrote. Dizer Capital founder Yassin Mobarak was particularly ferocious, accusing the former banker of corruption. “There is no reason why you shouldn’t disclose your connections to Vanguard, JP Morgan and Goldman Sachs, “he wrote.” You must resign. The stench of corruption on you is suffocating. (Gensler, who previously worked at the Wall Street giant Goldman Sachs and had an estimated net worth of up to $ 119 million in February 2021, he was never found guilty of bribery).

Many others, including leading cryptocurrency personalities Cobie and Loopify, took the opportunity to pressure Gensler over the SEC’s decision to stop approving a spot ETF on Bitcoin. “Ssounds good, then spot etf? ” She said Cobie.

Since taking the helm of the SEC in 2021, Gensler has often drawn the ire of the crypto community. Much of the frustration stemmed from the SEC’s refusal to approve a spot ETF on Bitcoin and Gensler’s repeated comments on how to regulate digital assets. Although he has made it clear that he thinks many crypto tokens qualify as securities, the SEC has not yet issued clear guidelines on that.

Gensler reiterated in June that he thought Bitcoin was a commodity, but was more opaque about his take on Ethereum and other assets. If Bitcoin were indeed a commodity, it would not fall within the purview of the SEC. The thousands of other crypto tokens on the market, however, could be in the SEC’s sights if deemed securities.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.