Key Insights:
Gary Gensler has officially submitted his resignation on 21 November 2024.
The current SEC chairman will depart the office on the same day as Trump assumes the Presidency, i.e., 20 January 2025.
Gensler was also responsible for the defeat of the SEC in a case against Ripple, a landmark event in the history of crypto.
Gensler was also accused of being irresponsible and making $450 million in losses due to the SEC's record number of anti-crypto cases during his tenure.
SEC chairman Gary Gensler has officially submitted his resignation and will depart as its chairman on 20 January 2024, the same day Donald Trump will be sworn in as the 47th President of the United States.
Trump had earlier promised he would fire Gensler from the SEC as soon as he assumed the Presidency.
The SEC has put an official notice mentioning the exit of Gensler.
Gary Gensler seems aware that Donald Trump's forceful exit from the agency Chair would seem much more insulting. He added that his exit from the chair was certain after Trump's win.
Donald Trump's 2024 Bitcoin Conference address at Nashville mentioned that he would end the Biden Administration's anti-crypto crusade.
The US SEC has pursued over a hundred cases against crypto projects, and at one point, it looked like an anti-crypto agency and not a securities market regulator.
The most well-known case against crypto projects under Gary Gensler was Ripple vs. SEC, in which the agency sought a fine of $2 billion for crypto sales that were only worth $1.3 billion. Further, the agency filed the case 7 years after the sales.
As a result, it lost both the retail sales part of the case and the institutional part of the sales. Ripple won the former while incurring a small fine of $125 million on the latter.
Another case includes the one against Coinbase, where the regulator faced severe trouble proving the charges because it simply lacks the mandate even if it proves cryptocurrencies are securities. To date, the agency has opened two investigations against Ethereum and XRP, trying to prove both of them as securities, but it had to close both cases due to the lack of any evidence.
Earlier, the SEC caused a 15% crash in the IMX token within hours when it alleged that it violated securities law. Before issuing this statement by the SEC, IMX claimed that they had only a 10-minute call with the regulator, and the decision to launch a case against IMX was shocking.
Gemini's Tyler Winklevoss earlier called him "evil." The SEC had also pursued a case against Gemini, forcing it to shut down its Earn Program, which provided staking and lending rewards to its users.
Other high-profile cases where the SEC has served the Wells Notice but hasn't been able to prosecute yet are MetaMask, Rocketpool, and Uniswap.
Overall, the agency was estimated to have caused $426 million in damages. If we calculate lost opportunity, this could be hundreds of billions.
The US SEC is governed by two acts: the Securities Act of 1933 and the Securities and Exchange Act of 1934. These acts created the US SEC and endowed it with regulatory power to govern the securities market.
The regulator is also limited by the Howey Test, mandated by the US Supreme Court. The test lays down 4 criteria which must be fulfilled before any financial instrument is categorized as a security. This means that the SEC
The cases we saw earlier were the work of one department, the Enforcement Department of the SEC. The agency has five other departments.
Overall, it is headed by five members, three of whom are Democrats: Gary Gensler, Caroline Crenshaw, and Jamie Lizzaraga, and two Republicans: Hester Peirce and Mark Uyeda. After Gensler's exit, the next chairman would probably be a Republican, giving them full control over the agency.
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