SEC Chair Gensler Thinks Crypto Regulation Will Bring Adoption

Timothy Craig

Aug. 3, 2021

While Gensler is no stranger to digital assets, his main priority is protecting investors from fraud.

Shutterstock cover by Kristi Blokhin

Key Takeaways

SEC chair Gary Gensler has indicated investor protection is a top priority for future SEC crypto regulation.
Gensler also stated that the regulation of cryptocurrencies could lead to broader adoption.
However, Gensler declined to comment on the possible approval of a Bitcoin ETF.

SEC chairman Gary Gensler has commented on his approach to cryptocurrency regulation, stating that investor protection is a top priority before wider adoption can occur.

Gensler Vows to Protect Investors

In a Tuesday interview with Bloomberg News, Securities and Exchange Commission Chair Gary Gensler laid out his views regarding future cryptocurrency regulation.

Gensler, who has a background teaching blockchain technology and finance at MIT, indicated that protecting investors from fraud in the cryptocurrency space is one of his biggest concerns. Speaking on the issue, he stated:

“While I’m neutral on the technology, even intrigued—I spent three years teaching it, leaning into it—I’m not neutral about investor protection… If somebody wants to speculate, that’s their choice, but we have a role as a nation to protect those investors against fraud.”

Following his appointment as head of the SEC in April, Gensler’s main focus has been investor protection. In addition to wanting further oversight of crypto assets, Gensler has also pledged to address issues that led to the purported GameStop short squeeze in January. However, on the issue of so-called “meme stocks” like GameStop and AMC Theatres, Gensler has focused more on the “gamification” of trading through apps such as Robinhood than underlying structural problems in the stock market.

While increased consumer protection is likely to lead to further regulation of crypto assets, Gensler has also acknowledged the potential of cryptocurrency technology for economic development. Taking a more optimistic view, Gensler indicated that cryptocurrencies could see broader adoption after being regulated, commenting:

“It’s only with bringing things inside—and sort of clearly within our public policy goals—that a technology has a chance of broader adoption.”

Another issue onlookers hoped Gensler would provide insight on is the approval of the first Bitcoin ETF in America. At least nine companies have filed applications with the SEC for a Bitcoin ETF, including major players such as Galaxy Digital Holdings Ltd. and Fidelity Investments. Although Gensler has spoken positively about cryptocurrency ETFs previously, he declined to comment on the progress of a decision.

Gensler’s comments on crypto oversight come as the crypto industry faces regulatory pressure from several facets of the U.S. government. Treasury secretary Janet Yellen recently urged regulators to “act quickly” regarding stablecoin regulation, citing risks to the financial system and national security. Additionally, the upcoming $1 trillion infrastructure bill has caused alarm in the crypto space, as it potentially enforces strict tax reporting requirements on those dealing with cryptocurrencies.

Disclaimer: At the time of writing this feature, the author owned BTC and ETH.

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