Power Shift! Biden Nominates Gary Gensler to Lead SEC, Reputation: A Strict Regulator Familiar with Blockchain

Jay Clayton, the chairman of the Securities and Exchange Commission (SEC) during the Trump administration, has stepped down. The appointment of the next chairman has been closely watched by the cryptocurrency community. As previously reported, Gary Gensler, who has been rumored to be nominated by Biden, is expected to take over. Additionally, Brian Brooks, the Acting Comptroller of the Currency (OCC) known for his cryptocurrency-friendly stance, may also be replaced after the change in administration.

Who is Gary Gensler?

Key Points:

1. 18 years at Goldman Sachs
2. Former Chairman of the Commodity Futures Trading Commission (CFTC)
3. Teaches blockchain courses at MIT

Gary Gensler served as the Chairman of the Commodity Futures Trading Commission (CFTC) under the Obama administration from 2009 to 2014; during Hillary Clinton's presidential campaign in 2016, he also served as the Chief Financial Officer. From 2017 to 2019, he chaired the Maryland Financial Consumer Protection Commission. With years of experience at Goldman Sachs, he also teaches at the MIT Sloan School of Management, focusing on artificial intelligence, blockchain, and emerging financial technologies.

Involved in the Development of the Sarbanes-Oxley Act

In 2002, Enron Corporation, a company with assets worth billions, went bankrupt within weeks. It was later discovered that there had been ongoing financial fraud issues, along with accounting scandals in several other companies. This led to the creation of the Sarbanes-Oxley Act in 2002. Gary Gensler served as a senior advisor in the development of this act, which was considered to be overly strict and significantly increased financial auditing costs.

SEC May Strengthen Consumer Protection, Gensler's Approach: Swift and Decisive

Tyler Gellasch, CEO of the non-profit consumer protection organization Healthy Markets, stated that Gary Gensler had been very proactive during his time at the CFTC, swiftly and decisively implementing strict regulations. He mentioned that one of Gary Gensler's strengths is his ability to cut through the noise, stay focused on the goal, and defend his regulations.

As a result, it is believed that the Biden administration will prioritize consumer protection. Gellasch believes that Gary Gensler's appointment will lead to increased scrutiny for private equity, venture capital investments, and fundraising markets. Companies are expected to provide more stringent disclosure to investors.

Potential Further Development in Cryptocurrency Regulation

Given Gary Gensler's background in teaching blockchain technology at MIT, there are expectations that he will introduce additional cryptocurrency regulatory frameworks in the United States.

In 2018, he stated, "The success of blockchain requires significant cost reductions in verification and operation. If not achieved, it is still recommended to use traditional technology, but I believe there are still many benefits to pursue." He also believes that Bitcoin, Ethereum, and Ripple are fundamentally securities.

Although during the previous chairman's tenure, Bitcoin and Ethereum were not considered securities, Ripple was targeted by the SEC for allegedly being an unregistered security, prompting closer scrutiny of future SEC enforcement actions.

Crypto-Friendly OCC Comptroller Position Changes Hands

During his tenure, Brian Brooks, the Comptroller of the Currency at the OCC, implemented many cryptocurrency-friendly policies and comments, including clarifying that banks can custody digital assets, banks can process stablecoin payments, and expressing optimism about DeFi.

However, Brian Brooks has stepped down, and Blake Paulson is currently serving as his interim replacement.