SEC Chair Gary Gensler Defends Agency's Crypto Stance, Calls Crypto "Risky" Asset for Everyday Investors

Former SEC Chair Gary Gensler defended the agency's regulatory stance on cryptocurrencies, saying it was aimed at investor protection. Gensler argued that cryptocurrencies are a "risky" asset class for everyday investors, with most tokens lacking fundamentals, and that they trade mostly on hype. He highlighted high-profile fraud cases during his tenure, including the Sam Bankman-Fried case. Gensler's approach was opposed by some prominent names, but the new SEC chair, Paul Atkins, has taken a more pro-cryptocurrency approach, launching initiatives like "Project Crypto" and withdrawing lawsuits against Coinbase and Kraken.

The crypto market has seen a significant shift in regulatory approaches under the SEC, with former Chair Gary Gensler and current Chair Paul Atkins taking distinct stances. Gensler, who led the SEC from 2021 to 2023, defended the agency’s regulatory actions against cryptocurrency firms, emphasizing investor protection. He argued that most cryptocurrencies lack fundamental value and are driven by hype, describing them as a risky asset class Gary Gensler Defends SEC’s Crypto Crackdown Amid SBF Questions^[1].

Gensler’s tenure was marked by nearly 100 lawsuits against prominent crypto firms, including Coinbase, Kraken, and Ripple Labs. He maintained that these measures were necessary to protect investors from fraud, citing the Sam Bankman-Fried case as an example of misconduct within the industry. However, his approach drew criticism from figures like Mark Cuban and Anthony Scaramucci, who contended that stringent regulation stifled innovation Gary Gensler Defends SEC’s Crypto Crackdown Amid SBF Questions^[1].

In contrast, current SEC Chair Paul Atkins has adopted a more collaborative and industry-friendly approach. He has shifted focus from lawsuits to clearer regulatory guidelines, introducing "Project Crypto" to adapt existing frameworks to blockchain-based financial systems. Under Atkins, lawsuits against Coinbase and Kraken have been withdrawn, signaling a departure from the enforcement-heavy policies of Gensler’s tenure [^1, 2].

Atkins’ approach is seen as a positive step by fintech experts, who believe it will elevate the digital asset market. The SEC’s new policy simplifies rules for exchanges, allowing for faster approval of crypto-ETFs and removing barriers for traditional banks to enter the market. This regulatory clarity is expected to enhance investor confidence and drive innovation US Crypto Market 2.0: How the American Approach to Digital Asset Regulation Has Changed and What It Means for Ukraine^[2].

The shift in regulatory approach has global implications. Ukraine, aiming to synchronize with European rules, is preparing to legalize cryptocurrencies. The new SEC policy, which aligns with European MiCA regulation, signals a readiness to establish a transatlantic corridor of rules, potentially benefiting Ukraine’s digital asset market US Crypto Market 2.0: How the American Approach to Digital Asset Regulation Has Changed and What It Means for Ukraine^[2].