Gary Gensler Confirmed As SEC Chairman: What Can Crypto Expect?
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Gary Gensler, professor of the Practice, Global Economics, and Management at Massachusetts Institute of Technology (MIT), was confirmed as chairman of the Securities and Exchange Commission (SEC) on Wednesday the 14th.
The professor has plenty of experience in the Finance sector having been a former Goldman Sachs banker and a commodities regulator under the administration of ex-president Barack Obama
With the increasing need for regulatory clarity for the cryptocurrency market in the world’s biggest economy, it is expected that the new SEC Chairman will be able to help bridge the gap that has been increasing over the last moves with the previous administration’s decision to go after Ripple and LBRY.
Gensler has focused on cryptocurrency and blockchain technology when working for MIT’s School of Management, which is sure to provide him with a unique insight that its predecessors lacked regarding the new financial market.
While the nomination was approved by a vote of 53 to 45, the appointment has been controversial among the 2 parties that compose the US senate, with critics like Sen. Patrick Toomey believing that “he will use the FCC and its regulatory powers to advance an agenda that should not be the purview of the SEC”.
On the other hand, Senate Banking Chair Sherrod Brown believes the appointment will prove to be especially successful when it comes to enforcement:
“Mr. Gensler has shown he has the guts to take on bad actors, no matter how big, no matter how powerful they are, and he will hold them accountable.”
What Can The Crypto Market Expect From This Appointment?
Given Gensler’s history as a professor at MIT, he has written extensively on the topic of cryptocurrency regulation, having indicated that he believed Cryptocurrencies to be “a moving target.”
Back in 2018, Gensler stated that he believes there was a “strong case” for XRP and ETH to be considered a security, which would mean they would have been traded in violation of the Securities Act.
Despite this, Gensler was adamant in his belief that the teams behind the cryptocurrencies should be part of the conversation to better categorize securities, which could indicate a change in direction for the SEC which has taken increasing actions against cryptocurrency projects for the last year.
While the confirmation hearings with the Senate Banking Committee back in March of 2021 saw Gensler be evasive regarding his stance on currency SEC policies regarding crypto, it was clear that he believes that crypto has revolutionized the financial ecosystem and needs to be promoted, regulated, and reviewed as necessary.
SEC Commissioner Unveils Updated Token Safe Harbor Proposal
Commissioner Hester. M Peirce released an updated version of her token safe harbor proposal initially suggested in February of 2020. The proposal aims to provide developers with a grace period of up to 3 years in which they are exempted from registration provisions.
If approved, this proposal would result in the facilitation of participation in and the development of decentralized and functional networks. The updated version was the result of feedback provided not only by securities lawyers and other regulators but also by the crypto community and members of the public.
The updated version adds 3 major points: The enhancement of token purchaser protections, the inclusion of an exit report requirement to improve transparency, and guidance on what outside counsel’s analysis should address.
The commissioner’s statement ended by referring to the opportunity that the new appointment represents for the commission to improve regulatory clarity:
“Now, as a new Chairman is coming into the SEC with a new agenda, is the perfect time for the Commission to consider afresh how our rules can be modified to accommodate this new technology responsibly. I invite the public to provide feedback on the updated proposal and look forward to the continued honest and open debate on how to address the issue.”
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