Who Will Protect Investors From The SEC?

By Roslyn Layton. December 5, 2021. (Forbes).

Last Wednesday, the current and previous chairmen of the Securities and Exchange Commission (SEC) shared what was billed as a “fireside chat” to open the Digital Asset Compliance & Marketing Summit. Gary Gensler and Jay Clayton spoke, took no questions, and agreed that the multi-trillion dollar crypto innovation space is a dark, menacing threat that legitimate crypto entrepreneurs must follow opaque rules or face crippling SEC lawsuits. Gensler made it clear that there is no difference between “fraudsters” and “good-faith actors” in crypto – both are lawbreakers endangering the public.

Many in the audience of crypto industry leaders, just maligned as crooks, were stunned. Gensler repeatedly said that “platforms need to come in and get registered,” as if everyone knew what he was talking about. Perianne Boring, the head of the Digital Chamber of Commerce tweeted, “People in the room are looking around and asking, “register as what?””

It’s a fair question given that the exchange Coinbase – the only crypto company to have gone public on the stock market – tried “going in”. Upon sharing to share its lending platform information, the SEC slapped Coinbase with a subpoena and the threat of what Gensler affectionately calls “the enforcement tool.”

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Biden and Trump S.E.C. Chiefs Trade Tips on How to Regulate Crypto

By Ephrat Livni. December 2, 2021. (The New York Times).

Regulators on the left and right rarely agree on policy. Yet, when it comes to cryptocurrency, two men who have led the Securities and Exchange Commission are remarkably aligned: The technology and offerings may be new, but old rules still apply.

Jay Clayton, the Republican S.E.C. chairman under President Donald J. Trump, interviewed Gary Gensler, the current S.E.C. chief in the Democratic Biden administration, on Wednesday at the Digital Asset Compliance and Market Integrity Summit in New York.

Mr. Clayton now advises crypto companies, and Mr. Gensler taught crypto classes as a professor at the Massachusetts Institute of Technology before joining the agency. When Mr. Clayton asked his successor whether the S.E.C. intended to regulate crypto, Mr. Gensler replied, “I don’t think you mind if I would quote you back to you.”

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Waging War on Cryptocurrency Would Be a Mistake for Democrats

By Former Rep. Albert Wynn (D-MD). November 30, 2021. (Bloomberg Law).

When innovation brings change to an industry, the government’s role is to observe first and then manage the change as necessary. The government should not be an obstacle to progress. The Democratic Party has long been a champion of inclusionary innovation, smoothing the disruption to families and workers while spreading the benefits as widely as possible throughout the economy.

I fear, however, that with the fintech revolution rising through decentralized finance and blockchain technology, some in our party are mobilizing for a war on cryptocurrencies that could be futile and economically costly to the country.

There is wide agreement that regulation is needed for digital assets. There must be strict protections against money laundering and fraud in coin offerings and the financial products emerging in this $2 trillion asset space.

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SEC Chair Gensler’s War On Crypto Is About His Resume

By Roslyn Layton. October 29, 2021. (Forbes).

Securities and Exchange Commission (SEC) Chair Gary Gensler’s crusade against cryptocurrencies has surprised many. His three-year stint as a senior advisor at the Massachusetts Institute of Technology (MIT) Media Lab’s Digital Currency Initiative before leading the SEC suggested that he would bring an enlightened approach to crypto. No such luck.

Gensler’s foray into cryptocurrencies appears to be more a professional resume builder than a coherent regulatory vision for the innovation that can democratize finance. Along the way, he’s been happy to play along with the SEC’s word games on whether crypto is a currency or security, as long as it moves him to center stage. It’s part of the DC playbook: the regulatory white knight confirmed on the premise to make things right, implements some industry-friendly policy marketed as pro-consumer, and then takes the next plumb job.

Many misread Gensler. His MIT perch conferred the appearance of academic expertise on blockchain. It turns out there is little record of him writing or speaking about the technology until the school hired him in 2018. His few academic presentations were co-authored by the driving force of the school’s crypto program, Media Lab director Joichi Ito. Gensler’s MIT speeches and interviews were not about the substance of blockchain but rather commentary curated to make him look like a policy expert.

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Congress Needs To Provide Guardrails for the Cryptocurrency Revolution

By Josh Hammer, Opinion Editor. October 21, 2021. (Newsweek).

The Chinese Communist Party poses the most comprehensive 21st-century threat to the American nation, the American people and the American way of life. The first half of this century will be defined by how the U.S. meets the Chinese challenge across the full spectrum of economic, national security, geopolitical and cultural issues. And an easily neglected aspect of our new great-power competition with our Far East arch-foe now cries out for diligent and prompt attention: safeguarding the fruits of the nascent, but ascendant, cryptocurrency revolution.

Last month, China effectively banned all cryptocurrency trading and mining, which the Communist Party increasingly views as a threat to its planned “digital yuan” sovereign digital currency, which may be released as early as 2022. The People’s Bank of China, the Chinese central bank and Federal Reserve equivalent, barred international exchanges from providing cryptocurrency services to Chinese investors and speculators. It also banned financial institutions and digital exchanges from facilitating domestic crypto transactions.

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Clayton, Gensler behind looming over-regulated crypto disaster

By Charles Gasparino. October 17, 2021. (New York Post).

A private meeting between then-Securities and Exchange Commission Chair Jay Clayton and a newly minted professor at the MIT business school named Gary Gensler appears to have set the stage for the misguided course of crypto-regulation we see today. 

Gensler, of course, would go on to take Clayton’s job after Joe Biden’s 2020 presidential victory. It’s unclear if the hyper-ambitious Gensler was actually prepping for that outcome by asking for the meeting. What is unmistakable: his intention to shape regulatory policy for crypto that has increasingly become a disaster.

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Congress needs to step up on crypto, or Biden might crush it

By Former Rep. George Nethercutt (R-Wash.). October 16, 2021. (The Hill).

Recent developments both domestically and abroad have finally catalyzed the Biden administration to take the long-delayed step of engaging on the many regulatory issues surrounding cryptocurrencies and blockchain technology.

One of the most promising economic innovations since the internet, the market cap of cryptocurrencies is now over $2 trillion and there is a growing consensus that the technology is here to stay. What the industry needs — and the American economy would benefit from most — is a partner to help develop a comprehensive regulatory framework that would cement our country’s role as the leader in this emerging field.

Unfortunately, the Treasury Department has decided to eschew such collaboration and go in a different direction. They are instead leading a closed-door effort with the Biden-appointed heads of financial regulatory agencies to draft recommendations on how the administration should crack down on digital assets.

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SEC head Gary Gensler under fire over crypto regulation

By Kiran Stacey and Stefania Palma. October 7, 2021. (Financial Times).

A senior Republican has hit out at Gary Gensler, the chair of the Securities and Exchange Commission, over his attempts to regulate cryptocurrencies, as its defenders increase their opposition to several regulatory proposals. Tom Emmer, a representative from Minnesota and co-chair of a group of lawmakers interested in blockchain, said he believed Gensler was overstepping his authority with his attempts to expand the SEC’s role in regulating cryptocurrencies.

Tom Emmer, a representative from Minnesota and co-chair of a group of lawmakers interested in blockchain, said he believed Gensler was overstepping his authority with his attempts to expand the SEC’s role in regulating cryptocurrencies.

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Still-young crypto industry could grow stronger — if SEC allows it to thrive

By Charles Gasparino. September 19, 2021. (New York Post).

The noise surrounding the $2.2 trillion crypto industry often drowns out the reality that we are on the verge of something revolutionary. If things go right, crypto and the blockchain technology could usher in the next Internet revolution. 

Things are now going terribly wrong. The US stands the very real chance of killing this business here by driving digital innovation overseas and ceding advancements to other countries including Communist China.

Why? Because our regulators, mainly those at the Securities and Exchange Commission, are either too feckless or too turf-hungry (or a combination of both) to understand the dangers of their asinine approach to overseeing a nascent and important technology.

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Gensler’s Crypto Mess: It’s Time For Congress To Teach The SEC What “Clarity” Means

By Jared Whitley. September 16, 2021. (Seeking Alpha).

The U.S. Securities and Exchange Commission (SEC) is playing a ridiculous game with the blockchain and cryptocurrency industry and the millions of investors it claims it’s trying to protect. The agency insists there is “clarity” on the rules it applies to digital assets, but will only communicate them through lawsuits. It tells the best, most innovative U.S. blockchain companies to “come in, talk to us,” and share the details of their product development line under the false pretense of guidance on being compliant, only to slap them with subpoenas instead. Not even the highest-priced securities lawyers can tell these companies what compliance looks like with any certainty. It’s driving exasperated American innovators overseas, and putting our economic future in danger.

If previous SEC Chairman Jay Clayton was the “most conflicted chairman in history”, then Biden’s pick – Gary Gensler – is the most clueless. Ever since he was confirmed he’s been saying that the rules on what makes a digital asset a security are “clear” and that he’s dedicated to “protecting investors”. But ask any retail digital asset investor and you’ll know that nothing is clear and none of them feels protected by Gensler. Quite the contrary, they see Gensler as the danger they need protection from.

It doesn’t even help to register your blockchain enterprise with the SEC to list it on the stock market. Coinbase, the leading crypto exchange platform, went public earlier this year and subjected itself to the full SEC cavity search. It competes with many non-listed blockchain companies offering lending products who haven’t faced any enforcement action from the SEC. Coinbase’s CEO Brian Armstrong shared his proposed lending product with Gensler’s people and they warned him if he started offering it, they’d drag him into court unless he registered the offerings as securities. He asked for guidance on why, and they refused to answer. A Wells notice followed, which is how the SEC warns you a lawsuit is coming. This behavior by the SEC was so shocking that some of Coinbase’s fiercest competitors rose to its defense.

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