Gensler's Pursuit for Crypto Regulation and the Market Impact

It’s no secret that the crypto market has experienced significant growth in recent years, with the crypto market cap chart showcasing the massive increase in value of various cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). 

Source: Coin360

With the top 50 cryptocurrencies gaining more prominence, the need for regulation becomes even more pressing. Enter Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), who’s been making headlines for his efforts to regulate the crypto space.

Gary Gensler’s Stance on Crypto Regulation

Gensler’s focus on crypto regulation is evident in his recent request for a $2.436 billion budget to protect investors and issuers in the rapidly growing and changing markets, including the cryptocurrency market. This increased funding would allow the SEC to hire 170 additional staff, most of whom would work within its enforcement and examination divisions.

Gensler emphasizes the importance of the SEC’s regulatory guidance in protecting the American public as the capital markets evolve. In FY 2022, the SEC received over 35,000 tips, complaints, and referrals related to crypto and recovered $6.4 billion in penalties and disgorgement through over 750 enforcement actions. The SEC’s crypto regulation efforts have been apparent, with Gensler set to testify in front of the House Financial Services Committee on April 18, where the committee will inquire about the SEC’s approach to rule-making and digital assets.

Source: Yahoo

Interestingly, Gensler stated that additional legislation for crypto is unnecessary, but Congress should be careful not to undermine existing laws. He also declined to comment on any potential actions against crypto exchange Binance, which was recently sued by the CFTC. Gensler emphasized that the SEC determines what constitutes a security and that crypto exchanges cannot decide for themselves. He also noted that regulations already exist to govern crypto and that most cryptocurrencies are securities. Overseas entities selling tokens to U.S. investors must comply with U.S. securities or CFTC laws.

SEC’s Legal Actions and the Crypto Exchange Exodus

As a result of the SEC’s legal actions towards crypto, some exchanges have chosen to cease operations or expand overseas. For example, the SEC has charged crypto trading platform Beaxy and its executives with running an unregistered securities exchange, broker, and clearing agency. Beaxy recently halted trading, citing an “uncertain regulatory environment.”

In response, prominent crypto exchanges like Coinbase and Gemini are now looking to expand their presence internationally. Coinbase is working on growing its global reach via a new trading platform, while Gemini is launching platforms for international users and preparing to offer perpetual futures products for international customers.

Source: Coin Clarity

The Future of Crypto Regulation in the US and Beyond

With the ongoing battle for fair crypto laws in the US, there’s still much work to be done. Adviser to the Crypto Council for Innovation, Sean Lee, believes that fair treatment of the crypto industry is possible in the United States. He suggests that financial reform was addressed following the 2008 financial crisis, so there’s no reason the same can’t be applied to crypto. The council is working to foster dialogue with politicians to help them understand the current landscape and learn from other jurisdictions’ approaches.

Source: Wild Digital

However, Lee acknowledges that there’s a lot of education needed, which organizations like the Crypto Council for Innovation are striving to provide. This assistance can help craft more progressive policies that enable both communities and companies to better understand the evolving landscape.

Sheila Warren, CEO of the Crypto Council for Innovation, hopes that the recent CFTC Binance lawsuit will mark the end of people exploiting the lack of regulatory clarity in the United States. With SEC Chair Gary Gensler requesting a larger budget to tackle the “Wild West” of crypto markets, it seems unlikely that the US government’s war on crypto will end soon.

Global Crypto Adoption

Hong Kong’s Path Forward

While the US grapples with crypto regulation, Hong Kong continues its path towards adoption. ProDigital Future, a new \(100 million fund launched by local investors, aims to finance early-stage Web3 companies in the region. The fund has already raised \)30 million in its half-year fundraising period and plans to reach $100 million by the end of 2023. ProDigital Future has already invested in six digital-asset projects and intends to embrace Hong Kong’s policies while expanding to Australia, Singapore, Europe, and the US.

Source: Velvet Escape

Hong Kong is also expected to issue virtual asset trading licenses to at least eight cryptocurrency-related firms by the end of this year as part of the city’s new crypto licensing regime. Angelina Kwan, CEO of financial services firm Stratford Finance and a former regulator of the Hong Kong Securities and Futures Commission (SFC), believes this move will further solidify Hong Kong’s position as a crypto-friendly jurisdiction.

Thailand’s SEC Encourages Digital Investments

While the US is tackling crypto regulation, other countries like Thailand are making strides to encourage digital investments. Thailand’s SEC is proposing to lift retail investment restrictions related to initial coin offerings (ICOs) to stimulate local technology development and the digital economy.

Source: Thailand Business News

Encouraging Larger Investments in Asset-Backed ICOs

The SEC aims to remove a 300,000 baht limit per person for asset-backed ICOs, enabling larger investments in projects such as real estate and infrastructure-backed ICOs. This move is expected to effectively monitor digital asset operations and reduce associated risks while promoting the growth of the digital asset market in the country.

Regulatory Changes and Public Consultation

The proposal follows a series of regulatory changes aimed at the digital asset market in Thailand. The new measures are subject to public consultation until April 27, giving interested parties the opportunity to weigh in on the potential impacts of these changes on the crypto landscape.

Conclusion: Navigating the Future of Crypto Regulation

Source: Freepik

As the cryptocurrency market continues to grow and evolve, regulators worldwide must adapt and respond to the challenges and opportunities it presents. Gensler’s pursuit of crypto regulation is a clear example of the ongoing efforts to protect investors and ensure a fair and transparent market. The broader crypto community must stay informed and engaged as new developments unfold in the regulatory landscape.

Your Questions, Answered

We understand that the world of crypto regulation can be complex and ever-changing. To help shed light on some of the questions surrounding Gary Gensler and the SEC, we’ve compiled answers to some common queries:

Did he resign?

Gary Gensler has not resigned from his position. He remains active as the Chairman of the Securities and Exchange Commission (SEC).

Who is Gary Gensler?

Appointed by President Joe Biden in 2021, Gary Gensler is the current Chairman of the SEC. Before taking on this role, he served as a professor at MIT, where he taught courses on blockchain technology, digital currencies, and financial technology.

Does he think Bitcoin is a security?

While he has not explicitly stated that Bitcoin is a security, he has made it clear that most cryptocurrencies are securities. He emphasizes that the SEC plays a crucial role in determining what falls under the category of a security.