From financial Jews to iron-fisted regulators, why does Gary Gensler keep suing crypto projects?
Original Author: Joy, PANews
Original Author: Joy, PANews
The first chairman of the US Securities and Exchange Commission, Joseph Kennedy (Joseph Kennedy) has a famous saying: "The US Securities and Exchange Commission wants to scare dishonest companies." Now, the approach of Chairman Gary Gensler has made encryption companies feel scared. It's not fear but loathing.
Due to the recent rampant prosecution of encryption institutions, Gensler has not only been criticized by the encryption circle, but also choked by the House of Representatives. Of course, Gensler has always been indifferent to these public opinions, and still justly cited the ancient Howey test that may not be applicable to cryptocurrencies to judge many encryption projects. As the iron-fisted regulator who knows encryption best, he has repeatedly accused the encryption project of "military medals" under which there are too many "careful thoughts".
A financial Jew from Wall Street, an iron-fisted regulator who once "bloodbathed" derivatives
Like FTX founder SBF, Gensler is also Jewish, born in a Jewish family in Baltimore, Maryland, USA. Gary Gensler started his career at Goldman Sachs and has been co-head of finance. At the age of 30, he became one of the youngest partners in the firm at the time. Goldman Sachs CEO Robert Rubin joined the Clinton administration in 1993 and became U.S. Treasury secretary in 1995, before Gensler followed his former boss to the U.S. Treasury Department as assistant secretary for financial markets in 1997, starting his political career.
Gensler served as a senior adviser to Hillary Clinton during her 2008 presidential campaign and advised Obama's campaign. During the Obama presidency, Gensler served as chairman of the U.S. Commodity Futures Trading Commission (CFTC) from 2009 to 2014. At that time, Gensler, who had just taken up the CFTC, was facing a situation that was somewhat similar to the current encryption market-the mess after the 2008 financial crisis and the derivatives market was in the Wild West. However, he successfully promoted the implementation of new regulations on US derivatives regulation. As a result, the Wall Street Journal called Gensler "a tough regulator who pushed for tougher rules to govern the trillion-dollar derivatives market."
Gensler then served as chief financial officer for Hillary Clinton's 2016 presidential campaign. However, during the period when the Democrats lost Trump’s term, Gensler went to teach at the School of Economics at the Massachusetts Institute of Technology. At that time, one of the courses he taught was blockchain and currency, and he talked about the development of Bitcoin and the impact of blockchain on the financial industry. Impact. He also served as chairman of the Maryland Financial Consumer Protection Commission, which was his dormant period for several years. With Biden in office, Gensler scored twice in his political career in 2021 with his appointment as SEC chairman.
Gary Gensler, who taught at MIT
The relationship with FTX is ambiguous, and its downfall has become a watershed in encryption regulation
The U.S. SEC frequently fires at encryption, and the head Gary Gensler turns from a financial Jew to an iron-fisted regulator
Then everyone gradually realized that it was precisely because of his understanding of encryption that he was able to strike out with more confidence. His regulatory policy on encryption was stricter than any previous SEC chairman. He hoped to carry out a campaign to "tame finance". Strengthen the regulation of the encryption market. A series of speeches by Gary Gensler emphasized the importance of investor protection and signaled that the SEC will strengthen supervision of the cryptocurrency field.
According to incomplete statistics from PANews, since Gensler took office, the work related to encryption projects has not only included multiple investigations and prosecutions, but also approved the listing of the first Bitcoin futures ETF.
In July 2021, Circle stated that it had received a subpoena for investigation from the SEC, and Circle’s listing application has also been unsuccessful.
In September 2021, the SEC warned Coinbase not to launch a lending product or it would file a lawsuit against Coinbase.
In September 2021, the SEC stated that it was investigating Uniswap Labs, collecting information to study how users interact with the platform, and Uniswap's marketing methods.
In a September 2021 interview, Gensler called on cryptocurrency exchanges to register with the SEC, warning that they would be hit with enforcement action from the SEC if they did not.
On October 19, 2021, the listing of the first Bitcoin futures ETF, The ProShares Bitcoin Strategy (codenamed BITO), was approved.
In November 2021, the SEC investigated up to 9.5% of BlockFi’s interest-bearing crypto accounts and deemed them securities. Then in February 2022, BlockFi and the SEC reached a settlement, paying the SEC $50 million.
In December 2022, following the downfall of FTX, the SEC sued FTX and founder SBF for anti-fraud violations.
In January 2023, Nexo settled for $45 million after being accused by the SEC of issuing and selling EIPs without registration.
In February 2023, Kraken was accused by the SEC of illegally issuing securities and quickly settled for $30 million.
In February 2023, the U.S. dollar stablecoin BUSD was accused by the SEC of illegally issuing securities.
In June 2023, sue the Coinbase exchange as well as Binance US and its founder Changpeng Zhao.
But his supervision of cryptocurrencies has intensified since the fall of FTX, from investigations to formal prosecutions. FTX’s thunderstorm has become a watershed event in US encryption regulation.PANews previously wrote "FTX ends: deep dive into SBF's "political business" and the private relationship of high-level regulators
" mentioned the relationship between Gensler and FTX. After Gensler returned to the political arena, his former CFTC staff have gone to FTX.US to take up positions. For example, Mark Wetjen, former CFTC acting head, was hired as FTX US policy and regulatory director in 2021; FTX US general counsel Ryne Miller was also Gensler's personal counsel at the CFTC. This has also triggered public speculation about the deep relationship between FTX and Gensler. It is worth mentioning that the father of Caroline, SBF's ex-girlfriend and Alameda's CEO, is a professor and director of economics at MIT, and Gensler's former boss when he was teaching at MIT. “My office has received reports that SEC Chairman Gary Gensler is helping SBF and FTX exploit legal loopholes to gain regulatory monopoly,” U.S. Congressman Tom Emmer tweeted in November.
Gensler's close association with FTX's executive team has also become a stain on his political career, and he has been seized by rivals. After FTX's collapse, Republicans lashed out at criticism, with Congressman Warren Davidson introducing new legislation that would have removed Gensler and filled the vacancy with an executive director at the SEC. House Financial Services Committee Chairman Patrick McHenry said in his tweet that the SEC’s crackdown on cryptocurrencies had failed to bring stability to the digital asset market, writing: “Your practices are driving innovation overseas and jeopardizing U.S. competitiveness.”
Enforcement of Crypto "Night of the Long Knives", Gensler's Regulatory Views Changed and Unchanged
Gary Gensler's attitude towards cryptocurrencies has a sharp contrast before and after he took office, but he has always supported Bitcoin, but he labeled cryptocurrencies as securities.
At a Blockchain Business Summit in 2018, Gary Gensler argued that blockchain technology has real potential to transform the financial world; while there are many technical and business challenges to overcome, this innovation could reduce costs for the financial system and risk. He is a blockchain optimist and wants to see the technology succeed.A new video shows Securities and Exchange Commission (SEC) Chairman Gary Gensler telling institutional investors in 2018 that BTC, ETH, LTC and BCH, which accounted for 75% of the crypto market at the time, were not securities, Forbes reported. . The remarks came at a time when cryptocurrencies were in the midst of a bull market and a little over two years before Gensler was named SEC chairman. The video, from a crypto-themed institutional investor event hosted by Bloomberg and Fidelity in 2018, contradicts his recent claim that all cryptocurrencies other than Bitcoin are now All are securities. Related Reading:"》
A map to understand the tokens that have been identified as securities by the US SEC
The U.S. SEC frequently fires at encryption, and the head Gary Gensler turns from a financial Jew to an iron-fisted regulator
While teaching at MIT, Gensler also encouraged students to get involved with Crypto. Manta Network co-founder and chief operating officer Kenny said on Twitter that he was a student in Gensler's class. Gary Gensler sent his report on BNB to Changpeng Zhao and encouraged him to participate in encryption more. He also had in-depth exchanges and discussions with Gensler on encryption projects in the summer of 2019. The statement appears to corroborate previous statements by Binance lawyers, with lawyers for Binance’s two law firms, Gibson Dunn and Latham & Watkins, claiming that Gary Gensler had offered to serve as an advisor to Binance’s parent company in 2019. Before Gensler began going after Binance, he had been trying to “get close” with the company, lawyers said. Because of Gensler’s relationship with Changpeng Zhao, Binance’s lawyers said they had asked Gensler to recuse himself from any action involving the company.
But after taking office as the chairman of the SEC, Gensler has a more critical attitude towards encryption. For example, he gave a speech at the SEC's annual "SEC Speaks" event in 2022, focusing on the regulation of the cryptocurrency market. "There are nearly 10,000 encrypted tokens in the current encrypted market, and I believe that most of them are securities, so the issuance and sale of these security-type encrypted tokens will be regulated by securities laws... I have asked the United States to SEC staff works directly with crypto project entrepreneurs to register and regulate the tokens they create as securities, where appropriate. …Given that many crypto tokens are securities, this means A lot of crypto intermediaries are doing securities trading, so they have to be registered with the SEC in some capacity.” His remarks on crypto on other occasions are also the same.
In February of this year, after the SEC accused BUSD, some encrypted KOLs said that the US Securities and Exchange Commission is actually embarking on its own encrypted version of "Night of the Long Knives." The Night of the Long Knives refers to the liquidation operation that took place in Nazi Germany from June 30 to July 2, 1934. Hitler used this purge to eliminate political opponents who opposed him and strengthen his control over the army.
