The SEC and its counterparts – particularly one man Gary Gensler, have proved to the financial world that reality is indeed stranger than fiction. Since the start of the crypto winter, the United States Securities and Exchange Commission (SEC) has had a visible hand in the crypto industry – and not in a positive light.
Many questions linger, but some remain apparent. What regulatory right does the centralized Commission have to go after decentralized finance? What framework is the SEC using to go after crypto entities? And, on what grounds is the current crypto crackdown legal? For the sake of argument, how are the SEC and Gary Gensler protecting crypto investors?
Gary Gensler tied to several crypto scandals
The man of the hour, Gary Gensler – more like the last year, has been caught in a web of crypto scandals and regulatory complaints. According to reports, six months after FTX’s bankruptcy on Nov. 11, 2022, SEC crypto-related enforcement actions have surged to at least 17. Analysis has estimated an increase of 183% from the period leading to the crypto winter.
After the collapse of FTX, Gensler was tied to FTX and SBF on several accounts. Soon after the collapse, the crypto community petitioned U.S. Congress to investigate possible connections between SEC Chair Gary Gensler and FTX. SEC documents confirmed that Gensler met with Sam Bankman-Fried and two other FTX personnel in March. Since then, neither FTX nor SBF has been sued by the SEC.
Wheels of Justice have been on a slow turn for FTX investors. The crypto community wonders what would happen if the SEC and Gary Gensler went after FTX and SBF the same way they are going after Binance.US, Kraken, and Coinbase. Swift justice, perhaps? Or not – SBF has names in his pocket in Washington DC after being an avid political donor to the Biden administration.
Today, another twist has come up. Gary Gensler approached the heads of Binance to be a financial advisor – But was evidently turned down. Reports have it on good authority that Gensler once offered to serve as an adviser to Binance.
According to Binance’s counsel, Changpeng “CZ” Zhao and Gensler held an in-person lunch meeting in Japan in March 2019, where they discussed the BNB crypto and Binance creating an exchange in the United States.
Crypto community members have pointed out that Gensler is out to kill crypto. This could allegedly be a confirmation because Gensler told CNBC that “We don’t need more digital currency. We have digital currency. It’s called the US dollar.”
One Twitter user by the name @HviidHEX stated that “It feels like Gary Gensler and the SEC in 2023 is attempting to weaken the whole crypto industry by falsely accusing everything of being a security when it isn’t.” How the SEC and Gary Gensler are handling Binance, Coinbase, Kraken, and the crypto market in the US shows selective justice. Maybe the same efforts should be directed at protecting crypto users from crypto villains like SBF.
Does the United States have crypto operational legislation?
The SEC and Gary Gensler have had partial or selective justice when dealing with the crypto industry. As SEC went after Coinbase, the crypto exchange has been trying to get operational guidelines from the regulatory body for months. Recently, Coinbase had to sue SEC in an attempt to get regularity clarity on matters it’s being accused of.
Now, crypto analysts have pointed out that the United States could risk an exodus of major Web3 and crypto service providers at the current stand of the crypto crackdown. at this moment, Gensler has gone further to compare the case of Binance with the collapse of FTX.
Gary Gensler referenced FTX’s alleged fraud and manipulation in relation to its sister company Alameda Research, as well as the alleged role of its creator Sam Bankman-Fried. Nobody buys that argument. Brad Garlinghouse, CEO of Ripple, tweeted on June 6 that the SEC is attempting to “distract” from its “FTX debacle” by filing a series of lawsuits against the company.
Amid the crypto woes caused by the SEC, Since the start of the week, figures across the crypto space have minted Coinbase’s Stand with Crypto non-fungible token (NFT) on minting platform Zora to mark their commitment to crypto while demanding regulatory clarity.
After minting the NFT, Twitter users have been called to display a shield emoji in their username in solidarity with the movement. Many in the industry have been hit with the reality that they need to defend the industry from the SEC and Gensler. However, most of these crypto entities have shown a willingness to work with SEC under established rules and guidelines.