SEC Chair Gary Gensler, who led US crackdown on cryptocurrencies, to step down

financial instruments and swap percentage Chair Gary Gensler, who was aggressive in his oversight of cryptocurrencies and other financial markets, will step down from his post on Jan. 20.

Gensler pushed changes that he said protected investors, but the industry and many Republicans bristled at what they saw as overreach.

President-elect Donald Trump had promised during his campaign that he would remove Gensler. But Gensler on Thursday announced that he would be stepping down from his post on the day that Trump is inaugurated.

Bitcoin has jumped 40% since Trump’s win. It hit recent highs Thursday and was nearing $100,000. Bitcoin moved notably higher still after Gensler’s resignation was announced.

Gensler’s stance on the rise of cryptocurrencies was captured during a talk he gave during the first year of his chairmanship in 2021 where he described the trade as “the Wild West.”

“This resource class is rife with fraud, scams, and abuse in sure applications,” he said in a talk at the Aspen safety Forum. “There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information.”

Under Gensler, the SEC brought actions against players in the crypto industry for fraud, wash market activity and other violations, including as recently as last month when the percentage brought fraud charges against three companies purporting to be trade makers, along with nine individuals for trying to manipulate various crypto markets.

Yet access to cryptocurrencies became more widespread under Gensler. In January, the SEC approved swap-traded funds that track the spot worth of bitcoin. With such ETFs, investors could get easier access to bitcoin without the huge overlays required to buy it directly.

Gensler, however, acknowledged the SEC had denied earlier, similar applications for such ETFs, including Grayscale Bitcoin depend, among the first to eventually be approved by the SEC.

“Circumstances, however, have changed,” Gensler said, pointing to a ruling by the U.S. Court of Appeals for the District of Columbia that said the SEC failed to adequately explain its reasoning in rejecting Grayscale’s proposal.

Even there, Gensler made sure not to endorse the merits of bitcoin. He pointed to how ETFs that hold precious metals are tracking prices of things that have “customer and industrial users, while in contrast bitcoin is primarily a speculative, volatile resource that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist capitalization.”

Gensler was tested early in his tenure with the rise of the meme stake phenomenon that shocked the financial structure in early 2021. Earlier this year, the SEC under Gensler pushed Wall Street to speed up how long it takes for trades of stocks to settle, one of the areas where the percentage’s staff recommended changes following the reckoning created by GameStop, one of the first meme stocks.

In the depths of the COVID-19 pandemic, hordes of smaller-pocketed and beginner investors suddenly piled into the stake of the struggling video-game retailer. During the height of the frenzy, several brokerages barred customers from buying GameStop after the clearinghouse that settles their trades demanded more money to cover the increased hazard created by its highly volatile worth.

In May 2024, recent rules meant agent-dealers have to fully settle their trades within one business day of the trade date, down from the previous two.

Critics of the SEC under Gensler have called many of the agency’s proposals overly burdensome.

The resource industry, for example, is pushing against a proposal to force some advisers and companies disclose more about their environmental, social and governance practices, otherwise known as ESG. Critics declare the proposal is overly complicated and increases the hazard of investor confusion, while imposing unnecessary burdens and costs on funds.

On Thursday, Gensler stood by the SEC’s track record under his path.

“The staff and the percentage are deeply mission-driven, concentrated on protecting investors, facilitating stake distribution formation, and ensuring that the markets work for investors and issuers alike,” Gensler said in prepared remarks. “The staff comprises factual community servants.”

Gensler previously served as Chair of the U.S. merchandise derivatives market activity percentage, leading the Obama Administration’s reform of the $400 trillion swaps trade. He also was elder advisor to U.S. Senator Paul Sarbanes in writing the Sarbanes-Oxley Act (2002) and was undersecretary of the Treasury for Domestic Finance and assistant secretary of the Treasury from 1997-2001.